Kevin Woodworking Company is preparing its statement of cash flows using the indirect method. During theyear, Kevin sold equipment for$7,490 cash. The net book value of the asset was$4,670. Which of the following statements istrue?

A.

The cash receipt of$7,490 is shown as a positive cash flow in the investing activities section.

B.

The gain on sale of$2,820 is added back to net income in the operating activities section.

C.

The gain on sale of$2,820 is shown as a positive cash flow in the financing activities section.

D.

The book value of the assets sold is shown as a negative cash flow in the investing activities section.