Treasury stock costing $$89,050$ was sold for $$94,375$ cash. Which of the following statements accurately describes the reporting of this transaction within the cash flow statement assuming that the indirect method is used to determine net cash flows from operating activities?

Multiple Choice

There is no adjustment necessary to net income but a $$94,375$ cash inflow is reported within the investing activities section of the cash flow statement.

A gain of $$5,325$ is deducted from net income and a $$94,375$ cash inflow is reported within the investing activities section of the cash flow statement.

There is no adjustment necessary to net income but a $$94,375$ cash inflow is reported within the financing activities section of the cash flow statement.

A gain of $$5,325$ is deducted from net income and a $$94,375$ cash inflow is reported within the financing activities section of the cash flow statement.

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