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) Zero. This is a financing activity.
C) $45,000.
D) Zero. This is an investing activity.
E) $5,000.

Question

Quizplus · Accepted Answer

The sale of a machine is considered an investing activity, not an operating activity, so it should not be reported in the operating activities section under the direct method.

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