Sale of an asset on the financial statements?

I was able to find an answer to the question "how does a sale of an asset impact the financial statements, however, I think it is a little complex. Could someone help simplifying this? My answer is:

1) On the income statement, the gain or loss is recorded in the one-time expense or revenue section and then adjusted for the effect of tax. For example, if the asset was on the books for $80 and sold for $100 there is a $20 gain on the asset. Then after subtracting out taxes (assuming a 40% tax rate) net income should be up by $12.

2) On the cash flow statement, net income ($12) flows onto the top of the statement of cash flows. Then you subtract the impact of the gain since it is a non-cash benefit (-$20). Then you need to add back the entire sale of the asset (+$100). The net change in cash is $92.

3) Finally, on the balance sheet - cash is up $92. The PP&E that was sold needs to be written off the books (-$80). Overall, the assets side of the balance sheet is up $12. The liabilities and equity side of the balance sheet is up by $12 as net income flows into the retained earnings on the equity side of the balance sheet.

 

Not sure you can get more simplified than what you wrote.

You could eliminate the first sentence of #1 and hop right into your example. And for #3 simply say cash is up $92, PP&E goes to zero for a net change of $12 on the assets side with RE up $12 from net income for everything to balance.

 

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