Question

1- Use the following information and the indirect method to calculate the net cash provided or used by operating activities: Net income $ 87,300 Depreciation expense 14,000 Gain on sale of land 6,300 Increase in merchandise inventory 4,050 Increase in accounts payable 8,150 2- A machine with a cost of $145,000 and accumulated depreciation of $100,000 is sold for $57,500 cash. The amount that should be reported as a source of cash under cash flows from investing activities is: Multiple Choice Zero. This is a financing activity. $45,000. Zero. This is an operating activity. $12,500. $57,500.

Answer 1

1.

Net income	$ 87,300
Depreciation expense	$ 14,000
Gain on sale of land	$ (6,300)
Increase in merchandise inventory	$ (4,050)
Increase in accounts payable	$    8,150
Cash flow from operating activities	$ 99,100

2. sale machinery will record as cash inflow from investing activities. it will use cash amount received at the time of sale. and gain or loss on sales will be add to net income under cash flow from operating activities. so answer will be $57,500 is an investing activity and $12,500 is an operating activity

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