Varsity Corporation sold available-for-sale marketable securities costing $800,000 for $860,000 cash. This transaction is reported in Varsity's income statement and statement of cash flows, respectively, as:

Question

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The $60,000 gain ($860,000 - $800,000) is reported in the income statement, and the full $860,000 cash receipt is reported in the statement of cash flows.

Varsity Corporation Sold Available-For-Sale Marketable Securities Costing $800,000 for $860,000