Use the information below to answer the following three (3) questions:

During 2005, XYZ Company sold equipment for $5,000. The equipment cost $20,000 and had accumulated depreciation of $12,000 at the time of sale.

1. The sale resulted in a:

a. Gain

b. Loss

2. The amount of the gain or loss is:

3. In a statement of cash flows presented using the indirect method:

a. $20,000 is added to the investing activities section

b. $20,000 is added to the operating activities section

c. $5,000 is added to the investing activities section

d. $5,000 is deducted from the investing activities section

e. None of the above