Valdez Co. sold land that had cost $48,000 for $60,000 cash. Which of the following statements is true about this transaction?
A. The $12,000 gain would be subtracted from net income in the operating activities section prepared using the indirect method and $60,000 would be reported as a cash inflow from investing activities.
B. $48,000 would appear as a cash inflow from investing activities and $12,000 would be added in the operating activities section using the indirect method.
C. $60,000 would appear as a cash inflow from investing activities.
D. The $12,000 gain would be subtracted from net income in the operating activities section using the direct method.
Answer: A
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