Chapter 11, Problem 12DQ

To determine

Introduction:

The indirect method helps the company to convert accrual basis of accounting to cash basis by adjusting the net income. It can be done by again adding non-cash expenses such as depreciation on fixed asset, amortization, bad debts written off and any losses on the sale of a fixed asset and by subtracting net income such as profit from sale of asset, and the dividend received.

To state:

The way the sale of equipment at a loss is recorded on the statement of cash flows using indirect method.