Illinois Woodworking Company is preparing its statement of cash flows using the indirect method. During the year, Illinois Woodworking sold equipment for $6490 cash. The net book value of the asset was $4770. Which of the following statements is true?
A) The gain on sale of $1720 is added back to net income in the operating activities section.
B) The book value of the asset sold is shown as a negative cash flow in the investing activities section.
C) The cash receipt of $6490 is shown as a positive cash flow in the investing activities section.
D) The gain on sale of $1720 is shown as a positive cash flow in the financing activities section.
Correct Answer:
Verified
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