Reference no: EM132617670

Problem 1: Company NAVU sold an equipment with a net book value of $31,000 for $27,000 cash. The indirect method statement of cash flows will reflect:

Option 1: an addition of $27,000 in the investing activities section and an addition of $4,000 in the operating activities section.

Option 2: an addition of $27,000 in the investing activities section and a deduction of $4,000 in the operating activities section.

Option 3: an addition of $31,000 in the investing activities section and an addition of $4,000 in the operating activities section.

Option 4: an addition of $31,000 in the investing activities section and a deduction of $4,000 in the operating activities section.

Option 5: None of the above.