A machine with a cost of $130,000 and accumulated depreciation of $85,000 is sold for $50,000 cash.The amount that should be reported in the operating activities section reported under the direct method is:
A)$50,000.
B)$5,000.
C)$45,000.
D)Zero.This is an investing activity.
E)Zero.This is a financing activity.

Question

Quizplus · Accepted Answer

The sale of a machine is considered an investing activity, not an operating activity. Therefore, the cash received from the sale would be reported in the investing activities section of the cash flow statement, not the operating activities section.

A Machine with a Cost of $130,000 and Accumulated Depreciation