How should the sale of $3,000 worth of cash equivalents costing $2,500 be reflected on the statement of cash flows prepared under the indirect method?

Question

Quizplus · Accepted Answer

The sale of cash equivalents is a cash inflow and is classified as an operating activity in the statement of cash flows under the indirect method. The difference between the sale proceeds ($3,000) and the cost of the cash equivalents ($2,500) is the cash inflow amount, which is $500 ($3,000 - $2,500). Therefore, the correct choice is A.

How Should the Sale of $3,000 Worth of Cash Equivalents