How is the sale of equipment reported on the statement of cash flows using the indirect method?
Statement of Cash Flows:
Most corporations in todays business world use the indirect method to prepare and file their statement of cash flows. This requires the company to start their operating activities section with net income, which is computed as total revenue minus total expenses, and convert this to the total amount of cash provided (used) during their main operations.
Answer and Explanation: 1
The sale of equipment may be reported in two sections of the statement of cash flows:
- Investing activities section: The cash proceeds from the sale...
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fromChapter 2 / Lesson 4
Learn about statements of cash flows. Discover what a cash flow statement is and see the indirect method statement of cash flows, net cash flows, and other examples.