A company uses the indirect method to prepare the statement of cash flows. How will a gain from the sale of equipment be presented on the statement of cash flows?

Question

Sydney Horton

Business

25 June, 05:17

A company uses the indirect method to prepare the statement of cash flows. How will a gain from the sale of equipment be presented on the statement of cash flows?

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Answers (1)

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Jessica Juarez · Answer 1

A gain from the sale of equipment is subtracted from net income to be presented on the statement of cash flows

Explanation:

The indirect method involves the adjustment of net income to arrive at the amount of cash generated by operating activities.

It depends on the account if it is added or subtracted to net income.

A gain from the sale of equipment will be subtracted from net income