The Sonesta Company sold equipment for cash. The income statement shows a loss on sale of $5,000. The net book value of...
The Sonesta Company sold equipment for cash. The income statement shows a loss on sale of $5,000. The net book value of the asset prior to sale was $24,000. Which of the following statements describes the cash effect of the transaction?
A.Negative cash flow of $19,000 in operating activities
B.Negative cash flow of $14,000 in financing activities
C.Positive cash flow of $29,000 in investing activities
D.Positive cash flow of $19000 in investing activities
Homework Answers
If net book value of assets = 24000
Loss on sale = 5000
Then Cash flow from investing activities = 24000-5000 = 19000
So answer is d) Positive cash flow of $19000 in investing activities
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