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.

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Definitions:

First Amendment

An amendment to the United States Constitution that guarantees freedoms concerning religion, expression, assembly, and the right to petition the government for a redress of grievances.

Print Media

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Media outlets, like TV and radio, that disseminate information, entertainment, and advertisements to the public via electromagnetic waves.

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The act of prayer in educational institutions, which can be a topic of debate due to concerns about religious freedom and the separation of church and state.