A company sold equipment with a book value of $10,000 at a gain of $2,500. How much will be reported in the investing activities section of the statement of cash flows as cash received upon the sale of the equipment?

Question

Quizplus · Accepted Answer

The gain of $2,500 represents the difference between the selling price and the book value. Therefore, the selling price for the equipment is $10,000 + $2,500 = $12,500. This is the cash received upon the sale of the equipment, which will be reported in the investing activities section of the statement of cash flows.

A Company Sold Equipment with a Book Value of $10,000