Caraway Company sold some of its plant assets during 2012. The original cost of the plant assets was $500,000 and the accumulated depreciation at date of sale was $310,000. The proceeds from the sale of the plant assets were $150,000. The information concerning the sale of the plant assets should be shown on Caraway's statement of cash flows (indirect method) for the year ended December 31, 2012, as a (n)

Select one:

a.

subtraction from net income of $150,000 and a $190,000 increase in cash flows from financing activities.

b.

addition to net income of $40,000 and a $150,000 increase in cash flows from investing activities.

c.

subtraction from net income of $190,000 and a $150,000 increase in cash flows from investing activities.

d.

addition of $150,000 to net income.

e. determine the amount of cash to be presented on the income statement