Beyond the Boardroom Corporation sold used equipment with a carrying amount of $25,000 for $29,000. The indirect method statement of cash flows will reflect:

Question

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The sale of used equipment for $29,000 represents a cash receipt from an investing activity, which should be reflected as an addition in the investing activities section. However, the carrying amount of the equipment was $25,000, so there is a difference of $4,000 which represents a gain on the sale of the equipment. Since the company is using the indirect method for the statement of cash flows, gains on the sale of assets are deducted from net income in the operating activities section. Therefore, there will be a deduction of $4,000 in the operating activities section.

Beyond the Boardroom Corporation Sold Used Equipment with a Carrying