Response to the following questions:
1. A company reports net income of $15,000 that includes a $3,000 gain on the sale of plant assets. Why is this gain subtracted from net income in computing cash flow from operating activities using the indirect method?
2. Equipment costing $80,000 with accumulated depreciation of $30,000 is sold at a loss of $10,000. What is the cash receipt from this sale? In what section of the statement of cash flows is this transaction reported?