Mays Company sold a machine for $10,000 cash. The machine originally cost $65,000 and the company had recognized $53,000 in depreciation over the life of the machine. What is the effect of this sale on Mays Company's income statement and its statement of cash flows?

Multiple Choice

• $2,000 loss on the income statement; $10,000 cash outflow from operating activities

• $2,000 loss on the income statement; $10,000 cash inflow from investing activities

• $55,000 loss on the income statement; $10,000 cash inflow from operating activities

• $55,000 loss on the income statement; $10,000 cash inflow from investing activities