In creating a statement of cash flows using the indirect method, a gain on the sale of plant assets must be shown as an addition to Net income in the operating activities section.

Question

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In the statement of cash flows using the indirect method, a gain on the sale of plant assets is subtracted from net income in the operating activities section to adjust for the fact that the gain increased net income but did not involve an actual cash inflow from operating activities.

In Creating a Statement of Cash Flows Using the Indirect