Tangiers Company reported a loss of $1,300 for the sale of equipment for cash

Accounting Mar 20, 2021

Tangiers Company reported a loss of $1,300 for the sale of equipment for cash. The equipment had a cost of $32,000 and accumulated depreciation of $29,500. How much will Tangiers report in the cash flows from investing activities section of its statement of cash flows?

a. $1,200

b. $1,300

c. $30,700

d. $3,800

Expert Solution

Answer: a .

Book value of equipment = Original Cost- Accumulated Depreciation

= $32000-$29500

= $ 2500

Sale proceeds of equipment = Book value -Loss of sale of equipment

= $2500-$1300

= $1200

Hence, sale proceeds of $1200 are shown in cash flow from investing activities.

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