At the end of 2014, Schenck Corporation sold its only piece of equipment for $9,000 cash, a price which resulted in a loss of $3,000. During 2014, depreciation expense recognized by Schenck was $1,000. Schenck uses the indirect method to compute net cash from operating activities. In reconciling profit for the year to net cash from operating activities under the indirect method, the required adjustments based upon the given data:

Question

Quizplus · Accepted Answer

The loss on sale of equipment is added back to profit for the year, and the depreciation expense is subtracted. So, the net adjustment is $3,000 + $1,000 = $4,000.

At the End of 2014, Schenck Corporation Sold Its Only