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)$0.
E)$35,000.

Question

Quizplus · Accepted Answer

Under the direct method, only cash transactions are reported in the operating activities section. The sale of the machine is an investing activity, not an operating activity, so it is not reported in the operating activities section.

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