An analysis of changes in selected balance sheet accounts of Hierarchy Corporation shows the following for the current year: Plant and Equipment accounts: Debit entries to asset accounts Credit entries to asset accounts Debit entries to accumulated depreciation accounts (resulting from sale of plant assets) Credit entries to accumulated depreciation accounts (representing depreciation for the current year) $504,000 $ 768,000 $72,000 $ 192,000 Hierarchy's income statement for the current year includes a $9,600 gain on disposal of plant assets. All payments and proceeds relating to purchase or sale of plant assets were in cash. How should purchases, sales, and depreciation of plant assets be classified in Hierarchy's statement of cash flows for the current year? (Assume the direct method is used by Hierarchy.) Select one: O a. Purchases of plant assets and depreciation are classified as investing activities; sales of plant assets are classified as operating activities. O b. Purchases of plant assets are classified as operating activities; sales of plant assets are classified as financing activities; depreciation is classified as an operating activity. O c. Since plant assets are used to generate income from operations, purchases, sales, and depreciation of plant assets are all classified as operating activities. O d. Purchases and sales of plant assets are classified as investing activities; depreciation does not appear as an operating, financing, or investing activity.

An analysis of changes in selected balance sheet accounts of Hierarchy Corporation shows the following for the current year: Plant and Equipment accounts: Debit entries to asset accounts Credit entries to asset accounts Debit entries to accumulated depreciation accounts (resulting fron sale of plant assets) credit entries to accumulated depreciation accounts (representing depreciation for the current year) $504,000 $768,000 5. 72,000 $192,000 Hierarchy's income statement for the current year includes a $9,600 gain on disposal of plant assets. Alf payments and proceeds relating to purchase or sale of plant assets were in cash. How should purchases, sales, and depreciation of plant assets be classifled in Hierarchy's atatement of cash flows for the current year? (Assume the direct method is used by Hierarchy.) Select one: a. Purchases of plant assets and depreciation are ciassified as inveating activities; sales of plant assets are classified as operating activies. t. Purchases of plant assets are classifled as operating activities; sales of plant assets are classified as financing activities; depreciation is classified as an operating acivity. c. Since plant assets are used to generate income from operations, purchases, sales, and depreciation of plant assets are ali classified as operating activites a. Purchases and saies of plant assets are class-fod as investing activites, deprociation does not appear as an operating, financing, or investing activity. An analysis of changes in selected balance sheet accounts of Hierarchy Corporation shows the following for the current year: Plant and Equipment accounts: Debit entries to asset accounts Credit entries to asset accounts Debit entries to accumulated depreciation accounts (resulting from sale of plant assets) Credit entries to accumulated depreciation accounts (representing depreciation for the current year) $504,600 $768,090 572,000 $192,000 Hierarchy's income statement for the current year includes a 59,600 gain on cisposal of plant assets. Ai payments and proceeds felating to purchase or sale of plant assets were in cash. How should purchases, sales, and depreciation of plant assets be classified in Hierarchy's statement of cash flows for the curtent year? (Assume ihe direct method is used by Hierarchy.) Select one: a. Purchases of plant assets and depreciation are classifted as investing activities; sales of plant assets are classitied as operating octivities. b. Purchases of plant assets are classified as operating activites; sales of plant assets are classified as financing activities; depreciation is classifled as an operating activity. c. Since plant assets are used to generate income from operations, purchases, sales, and depreciation of plant assets are all classified as operating activities. 1. Purchases and saies of plant assets aco classified as investing activeles depreciation does not appear as an operating, financing, or investing activity