Marsh Company owned an asset that had cost $22,000. The company sold the asset on January 1, 2013 for $8,000. Accumulated depreciation on the day of sale amounted to $16,000. Based on this information, the sale would result in:
A)An $8,000 increase in total assets.
B)An $8,000 cash inflow in the investing activities section of the cash flow statement.
C)A $2,000 gain in the investing activities section of the statement of cash flows.
D)A $2,000 cash inflow in the financing activities section of the cash flow statement.

Question

Quizplus · Accepted Answer

Cash flows are only affected by the $8,000 cash received on the sale. Cash flows are not affected by the book value of the asset. The $8,000 is reported as a cash inflow from investing activities. Total assets increase by $2,000, the difference between the $8,000 cash received and the $6,000 book value of the asset sol

Marsh Company Owned an Asset That Had Cost $22,000