The Sonesta Company Uses the Indirect Method for the Statement

question 14

Multiple Choice

The Sonesta Company uses the indirect method for the statement of cash flows. In 2013, they sold equipment for $4,800 cash. The net book value of the asset prior to sale was $4,000. Which of the following statements is true?

• A) The gain on sale of $800 would be added back to net income in the operating activities section.
• B) The book value of the assets sold would be shown as a negative cash flow in the investing activities section.
• C) The cash receipt of $4,800 would be shown as a positive cash flow in the investing activities section.
• D) The gain on sale of $800 would be shown as a positive cash flow in the financing activities section.

---

Definitions:

Aromatic

Relates to organic compounds that contain one or more planar rings of carbon atoms with delocalized π electrons, providing unique stability and chemical properties.

Tropylium Bromide

A chemical compound featuring a tropylium ion, which is positively charged, paired with a bromide ion.

AntiAromatic

Describes compounds that have cyclic, conjugated electron configurations but do not follow Hückel's rule, often being less stable.

Flat

Referring to a surface or shape having a smooth, even, and continuous plane without any significant curvature or elevation.