AMC Entertainment operates 380 movie theaters in the United States, Canada, and Europe.
During fiscal 2008, the company sold its Fandango assets for $20,360,000 cash and recorded a gain on disposal of $18,360,000, which was included in the company’s net income of $43,445,000.
1. Show how the disposal would be reported on the statement of cash flows, using the following format (which assumes the indirect method):
Cash flows from operating activities.
Net income ...... $43,445
Gain on sale of property........
Cash flows from investing activities...
Proceeds from disposition of property..
2. Compute the book value of the Fandango assets that were sold.