A Company Uses the Indirect Method to Prepare the Statement

question 177

Multiple Choice

A company uses the indirect method to prepare the statement of cash flows. It sold a piece of equipment at a loss of $8600. The equipment was purchased several years ago for $72,500 and had accumulated depreciation of $57,900. What is reported under the operating activities section on the statement of cash flows?

• A)Cash proceeds of $6000 are subtracted from net income.
• B)Cash proceeds of $6000 are added to net income.
• C)The loss of $8600 is subtracted from net income.
• D)The loss of $8600 is added to net income.