Wanda Company sold an asset for $10,000 on September 6,2018.The historical cost of the asset was $22,000,and the asset's accumulated depreciation at the date of sale was $14,500.Which of the following statements is correct?

Question

Quizplus · Accepted Answer

Since Wanda sold an asset, it will record a cash inflow from investing activities of $10,000 in its 2018 financial statements. Additionally, it will need to adjust for the difference between the asset's historical cost and accumulated depreciation. The gain on the sale of the asset will be calculated as $10,000 (sale price) - $7,500 (book value) = $2,500. This gain will be reported as a cash inflow from investing activities on the statement of cash flows.

Wanda Company Sold an Asset for $10,000 on September 6,2018