Question

A machine with a cost of $149,000 and accumulated depreciation of $104,000 is sold for $59,500 cash. The amount that should be reported as a source of cash under cash flows from investing activities is:

ZeroThis is a financing activity.
$45,000. Zero.
This is an operating activity
. $14,500.
$59,500.

Answer 1

Answer:

The $59,500 is the amount that should be reported as a source of cash under cash flows from investing activities.

Explanation:

Investing Activity: It is the activity of the cash flow statement in which the purchase and sale of fixed assets are recorded. The purchase of fixed assets is an outflow of cash which means the amount should be in negative, whereas the sales of fixed assets is an inflow of cash that means the amount should be positive.

Since in the question, the machine was sold for $59,500 in cash which comes under investing activity.

Hence, the $59,500 is the amount that should be reported as a source of cash under cash flows from investing activities.