Answer:
a) Adjustment of (16,000) in the Operating Section
Explanation:
The adjustment required in the operating activities section of the cash flow statement is shown below:
Loss of sale of equipment $30,000
Less: Gain on sale of debt investment -$46,000
The net deduction is $16,000
Since there is a loss on sale of an equipment so the same is to be added back and there is a gain on sale of investment with respect to debt so the same is to be deducted
hence, the correct option is a.
a)Adjustment of (16,000) in the Operating Section would need to be made to Net Income to account for Gain or Loss in calculating cash flow from Operating Activities using the indirect method.
Loss of sale of equipment $30,000
Less: Gain on sale of debt investment -$46,000
The net deduction is $16,000
When you consider that there is a loss on the sale of a device so the identical is to be introduced back and there is a benefit on the sale of funding with respect to debt so the equation is to be deducted.
An income statement is an economic declaration that suggests you the employer's earnings and expenses. It additionally shows whether an enterprise is making profit or loss for a given period.
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