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Net effect of sale of equipment

Question 34: Alaric Corporation recently sold equipment for $35,500. The equipment was purchased five years ago for $127,000. The accumulated depreciation on the equipment on the date of sale was $78,000. Alaric uses the indirect method to prepare its statement of cash flows. What net effect will this sale have on the investing activities section of Alaric's statement of cash flows for the current year?

$26,500 increase
$28,500 decrease
no effect
$35,500 increase

Solution Summary

The solution explains how to determine the net effect in the statement of cash flows of a sale of equipment