Puget Sound Co. sold available-for-sale marketable securities costing $80,000 for $92,000 cash. In the company's income statement and statement of cash flows, respectively, this will appear as:

Question

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The sale of the marketable securities will result in a gain of $12,000 ($92,000 selling price - $80,000 cost), which will be reported on the income statement. The company received $92,000 in cash from the sale, which will be reported on the statement of cash flows as a cash receipt. Therefore, choice A is the best option.