Kevin Woodworking Company Is Preparing Its Statement of Cash Flows

question 58

Multiple Choice

Kevin Woodworking Company is preparing its statement of cash flows using the indirect method.During the year,Kevin sold equipment for $7,490 cash.The net book value of the asset was $4,670.Which of the following statements is true?

• A)The gain on sale of $2,820 is added back to net income in the operating activities section.
• B)The book value of the assets sold is shown as a negative cash flow in the investing activities section.
• C)The cash receipt of $7,490 is shown as a positive cash flow in the investing activities section.
• D)The gain on sale of $2,820 is shown as a positive cash flow in the financing activities section.

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Definitions:

Restitution

The act of making amends for wrongdoing or harm caused, often involving compensation or repair.

Retribution

The concept of punishment imposed on someone as vengeance for a wrong or criminal act.

Punishment

A consequence given in response to an undesirable behavior with the intent of reducing that behavior's occurrence.

Bullying

aggressive behavior among school-aged children that involves a real or perceived power imbalance.