A corporation uses the Indirect Statement of Cash Flows. A fixed asset has been sold for $25,000 representing a gain of $3,750. The value in the operating activities section regarding this event would be:
A) $25,000
B) ($3,750)
C) $28,750
D) $3,750

Question

Quizplus · Accepted Answer

The gain from the sale of a fixed asset is considered a non-operating activity and is not included in the operating activities section of the indirect statement of cash flows. Therefore, the value in the operating activities section regarding this event would be the net cash received from the sale of the asset, which is $25,000. The gain of $3,750 would be reported in the investing activities section. So, the correct answer is ($3,750).

A Corporation Uses the Indirect Statement of Cash Flows