Question

Creative Camera Co. sold equipment with a cost of $ 18 comma 000 and accumulated depreciation of $ 9 comma 000 for an amount that resulted in a gain of $ 2 comma 000. What amount should Creative report on the statement of cash flows as​ "proceeds from sale of plant​ assets"?
a. $16,000
b. $12,000
c. $8,000
d. Some other amount

Answer 1

Answer:

d. Some other amount - $11,000

Explanation:

Investing activities: It records those activities which include purchase and sale of the long term assets . The purchase of long term assets is an outflow of cash and the sale of long term assets is an inflow of cash

The computation of the sale of plant assets is shown below:

= Sale value  of equipment - accumulated depreciation + gain on sale of equipment

= $18,000 - $9,000 + $2,000

= $11,000