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26 February, 08:24

If a gain of $11,000 is realized in selling (for cash) office equipment having a book value of $55,000, the total amount reported in the cash flows from investing activities section of the statement of cash flows is

a. $11,000

b. $66,000

c. $55,000

d. $44,000

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  1. 26 February, 08:45
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    The answer is B. $66,000

    Explanation:

    What are the items under investing activities of cash flow? - Sale and purchase of long-term assets or non-current assets. Purchase is an outflow while sale is an inflow.

    The book value of the sold equipment was $55,000 and gain was $11,000. Therefore the equipment was sold for:

    $55,000 + $11,000

    =$66,000.

    So there was an inflow of $66,000.

    The $11,000 gain will be shown under operating section of the cash flow.
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