In Its 2013 Income Statement, WME Reported a $40,000 Loss

Multiple Choice

In its 2013 income statement, WME reported a $40,000 loss on the sale of equipment. In its reconciliation schedule, WME should:

A) Report a $40,000 cash outflow for the direct method.
B) Show a $40,000 positive adjustment to net income under the indirect method.
C) Show a $40,000 negative adjustment to net income under the indirect method.
D) None of the above is correct.