The gain on the disposal of equipment is deducted from profit when calculating net cash provided (used) by operating activities in the indirect method. Jacques doesn't understand why gains aren't added, rather than deducted, on the statement of cash flows since they result in an increase in profit on the income statement. He also doesn't understand why only the gain and not the proceeds from the entire disposal of the equipment is reported in the operating activities section. Help Jacques understand the reporting of the disposal of equipment on the statement of cash flows?