The Sonesta Company uses the indirect method for the cash flow statement.In 2017,they sold equipment for $4,800 cash.The net book value of the asset prior to sale was $4,000.Which of the following statements is true?
A) The gain on sale of $800 would be added back to net income in the operating activities section.
B) The book value of the assets sold would be shown as a negative cash flow in the investing activities section.
C) The cash receipt of $4,800 would be shown as a positive cash flow in the investing activities section.
D) The gain on sale of $800 would be shown as a positive cash flow in the financing activities section.
Correct Answer:
Verified
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