Madison Company owned an asset that cost $44,000. The company sold the asset for $16,000. Accumulated depreciation on the day of sale amounted to $32,000. Which of the following statements is true?

Question

Quizplus · Accepted Answer

The proceeds from the sale of the asset will be recorded as a cash inflow in the investing activities section of the cash flow statement. The amount of the cash inflow will be equal to the selling price of $16,000. There will be no increase in total assets or a gain recorded on the statement of cash flows. The transaction does not involve any financing activities, so there will be no cash inflow in the financing activities section of the cash flow statement.

Madison Company Owned an Asset That Cost $44,000