Explanation Statement of cash flows: Statement of cash flow is a financial statement that shows the cash and cash equivalents of a company for a particular period of time. It shows the net changes in cash, by reporting the sources and uses of cash as a result of operating, investing, and financing activities of a company. Cash flows from operating activities: These refer to the cash received or cash paid in day-to-day operating activities of a company. Indirect method: Under this method, the following amounts are to be adjusted from the Net Income to calculate the net cash provided from operating activities. Deduct increase in current assets. Deduct decrease in current liabilities. Add decrease in current assets. Add the increase in current liability. Add depreciation expense and amortization expense. Add loss on sale of plant assets. Less gain on sale of plant assets. Option a: Cash generated from the sale of plant assets is reported in the investing activity section, but the gain earns from the sale of plant assets is reported in the operating activity section...

Financial Accounting, Student Value Edition (12th Edition)

12th Edition

ISBN: 9780134727066

Author: C. William Thomas, Wendy M. Tietz, Walter T. Harrison Jr.

Publisher: PEARSON

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Chapter 11, Problem 11.43Q

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To describe: The treatment of a gain on the sale of plant assets on an indirect method statement of cash flow.

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Chapter 11, Problem 11.42Q

Chapter 11, Problem 11.44Q

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Chapter 11 Solutions

Financial Accounting, Student Value Edition (12th Edition)

Ch. 11 - Quick Check (Answers are given here) The statement...Ch. 11 - Prob. 2QC Ch. 11 - Prob. 3QC Ch. 11 - Which of the three types of activities reported on...Ch. 11 - Prob. 5QC Ch. 11 - On the statement of cash flows, which of the...Ch. 11 - On the statement of cash flows, which of the...Ch. 11 - Prob. 8QC Ch. 11 - Prob. 9QC Ch. 11 - Which of the following transactions does not...

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The treatment of a gain on the sale of plant assets on an indirect method statement of cash flow .

Solution Summary: The author explains how a gain on the sale of plant assets is treated on an indirect method statement of cash flow.

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To describe: The treatment of a gain on the sale of plant assets on an indirect method statement of cash flow.

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Chapter 11 Solutions