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

Question

Quizplus · Accepted Answer

Under the direct method, gains from the sale of equipment are not included in operating activities; they are part of investing activities. Therefore, $0 is reported in operating activities for this transaction.