During fiscal 2013, M&Q Entertainment sold its Ferentio 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.
Required
1. Show how the disposal would be reported on the statement of cash flows, using the following format (which assumes the indirect method):

2. Compute the book value of the Ferentio assets that were sold?

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(In thousands) Cash flows from operating activities Net income $43,445 Gain on sale of property Cash flows from investing activities Proceeds from disposition of property