Nickels Inc

question 5

Multiple Choice

Nickels Inc.prepares its statement of cash flows using the direct method.If Nickels sells equipment for a gain of $35,000 when the book value is $100,000,what amount will be reported on the statement of cash flows operating activities section related to this gain?

• A)$0
• B)($35,000)
• C)($65,000)
• D)$65,000
• E)None of the answer choices is correct.

---

Definitions:

Novation

The act of replacing an existing contract with a new one, where a new party takes over rights and obligations that were originally held by one of the initial parties.

RUPA

The Revised Uniform Partnership Act, which is a set of laws intended to govern the operations of partnerships in the United States.

Wrongfully Dissociated

Incorrectly separating from a partnership or organization in violation of the terms or conditions of agreement.

Winding Up

The process of closing down a company by settling its debts and distributing any remaining assets to the shareholders.