Braden and Sons, Inc. paid cash to purchase equipment costing $342,000 this year. Also this year, the company sold for $70,000 cash, equipment that originally cost $230,000 five years ago. How should these transactions be listed in the statement of cash flows?

Braden can combine the transactions and show a decrease to cash for $112,000.

Braden can combine the transactions and show a decrease to cash for $272,000.

The purchases and the sales of equipment must be shown separately as a decrease to cash for $572,000 (purchase) and an increase of $70,000 (sale).

The purchases and the sales of equipment must be shown separately as a decrease to cash for $342,000 (purchase) and an increase of $70,000 (sale).