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.