During fiscal 2017, M&Q Entertainment sold its Ferentio assets for $20,360,000 cash and recorded a gain on disposal of $18,360,000, which was included in the company’s net income of $43,445,000.

Required:
1. Show how the disposal would be reported on the statement of cash flows, using the following format (which assumes the indirect method):

(in thousands)
Cash flows from operating activities
Net income.....................................................$43,445
Gain on sale of property
Cash flows from investing activities
Proceeds from disposition of property

2. Compute the book value of the Ferentio assets that were sold.