A building with a cost of $163,000 and accumulated depreciation of $32,000 was sold for an $11,000 gain.When using the indirect method,the cash generated from this investing activity was $131,000.

Question

Quizplus · Accepted Answer

The cash generated from the sale is calculated by subtracting the book value of the building from the sale price. The book value is the cost minus accumulated depreciation ($163,000 - $32,000 = $131,000). Since the sale resulted in an $11,000 gain, the sale price was $142,000 ($131,000 book value + $11,000 gain).

A Building with a Cost of $163,000 and Accumulated Depreciation