Question: An analysis of the machinery accounts of Doonan Company for 2008 is as follows:
Machinery, Net
Accumulated Accumulated
Machinery Depriciation Depriciation
Balance at January 1,2008 $500,000 $125,000 $375,000
Purchases of new machinery
in 2008 for cash 200,000 - 200,000
Depriciation in 2008 - 100,000 100,000
Balance at Dec. 31,2008 $700,000 $225,000 $475,000
The information concerning Doonan's machinery accounts should be shown in Doonan's statement of cash flows (indirect method) for the year ended December 31, 2008, as a(n)
A) subtraction from net income of $100,000 and a $200,000 decrease in cash flows from financing activities.
B) addition to net income of $100,000 and a $200,000 decrease in cash flows from investing activities.
C) $100,000 increase in cash flows from financing activities.
D) $200,000 decrease in cash flows from investing activities.