On January 1, 2009, SK Company pays $205,000 cash for factory equipment that has an estimated useful life of 10 years and an expected residual value of $5,000. What will SK report on its income statement for the year ended December 31, 2010?
Financing activity cash outflow of $ (20,000)
Investing activity cash outflow of $ (20,000)
Cash payment of $205,000
Depreciation expense of $20,000