Equipment would be reported in the statement of cash flows

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Reference no: EM131212859

A company bought $1,150,000 of equipment with an expected life of 28 years and no residual value. After 24 years the company sold the equipment for $128,500. If the company uses straight-line depreciation and the indirect method is used to determine cash flows from operating activities, which of the following reflects how the sale of the equipment would be reported in the statement of cash flows? (Do not round intermediate calculations. Round your answer to nearest whole number.)

$128,500 is recorded as a cash inflow from investing activities and $35,786 is added to convert net income to net cash flow provided by operating activities.

$128,500 is recorded as a cash inflow from investing activities and $35,786 is subtracted to convert net income to net cash flow provided by operating activities.

$128,500 is recorded as a cash inflow from operating activities.

$128,500 is recorded as a cash inflow from investing activities and no other sections of the statement are affected.

Reference no: EM131212859

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