Fizzzle Inc

Multiple Choice

Fizzzle Inc.sold a piece of equipment during the period for $230,000 and recorded a gain of $45,000 on the sale.How should this gain be treated when preparing the operating activities section of the statement of cash flows using the indirect method?

A) A sale of equipment is a investing activity, the transaction will not affect the operating activities section.
B) The gain is added back to net income in the operating activities section.
C) The gain is subtracted from net income in the operating activities section.
D) The entire sales price is subtracted from net income in the operating activities section.