Question

Last year Abby charged $4,284,000 Depreciation on the Income Statement of Andrews. If Abby sold a fully depreciated piece of equipment at a loss, the effect on Andrews's financial statements would be (all other items remaining equal): Select: 1 Decrease Net Cash from operations on the Cash Flow Statement No impact on Net Cash from operations Increase Net Cash from operations Just impact the Balance Sheet

Answer 1

A. No impact on net cash from operations.

Since sale of equipment is an investing activity, the sale of equipment on loss will not be impacting net cash flow from operations.