The Sonesta Company Sold Equipment for Cash

question 20

Multiple Choice

The Sonesta Company sold equipment for cash. The income statement shows a gain on sale of $800. The net book value of the asset prior to sale was $4,000. Which of the following statements describes the cash effect of the transaction?

• A) Negative cash flow of $4,800 in investing activities
• B) Negative cash flow of $3,200 in operating activities
• C) Positive cash flow of $4,800 in investing activities
• D) Negative cash flow of $800 in financing activities

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