Lightning Co.'s balance in their "prepaid insurance" account $20,000 at Dec 31, Year 2 and $10,000 at Dec 31, Year 1. Insurance expense was $12,000 for Year 2 and $6,000 for Year 1. How much cash paid for insurance would be reported in Lightning Co's Year 2statement of cash flows prepared using the direct method?

A)$18,000

B)$12,000

C)$8,000

D)$22,000

Hornblower Co. sold some equipment during year 1 for $21,000 cash. The equipment originally costed $150,000. Accumulated Depreciation up until the point of sale was $140,000. This transaction should be shown on Hornblower Co's Year 1 statement of cash flows (indirect method) as a(n)

A)deduction from net income of $11,000 and a $10,000 cash inflow from financing activities.

B)addition to net income of $21,000.

C)deduction from net income of $11,000 and a $21,000 cash inflow from investing activities.

D)addition to net income of $11,000 and a $21,000 cash inflow from investing activities.