The income statement of Hope Market,Inc.reported a gain from the sale of land.How are the cash flow effects of this transaction reported on the statement of cash flows if the direct method is used to prepare the Operating Activities category?

Question

Quizplus · Accepted Answer

The proceeds from the sale of land are considered an investing activity because it involves the sale of a long-term asset. This is consistent with the classification of cash flows in the statement of cash flows, where investing activities include transactions involving the acquisition and disposal of long-term assets.

The Income Statement of Hope Market,Inc