ACCA FA · Chapter 12 · Question 7 of 10
A machine with a carrying amount of $15,000 was sold, giving a profit on disposal of $3,000. What amount is shown in investing activities in the statement of cash flows?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Inflow of $18,000
Explanation
Disposal proceeds = carrying amount + profit = $15,000 + $3,000 = $18,000, and this cash received is an investing inflow. The $3,000 profit is deducted from profit before tax in operating activities because it is non-cash; the actual cash is shown under investing activities.
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