Question

Use the following information and the indirect method to calculate the net cash provided or used by operating activities: Net income $ 86,300 Depreciation expense 13,000 Gain on sale of land 7,300 Increase in merchandise inventory 3,050 Increase in accounts payable 7,150

Answer 1

Answer:

The correct answer is Net cash= 96.100,00

Explanation:

Depreciation expenses must be added back to net income.

Also,  Increase in accounts payable is added to net income

Gain on sale of land and Increase in merchandise inventory are subtracted from net income

So,

Indirect Method

Net income                       86.300,00

Depreciation expense       13.000,00

Increase in accounts payable   7.150,00

Gain on sale of land       (7.300,00)

Increase in merchandise inventory (3.050,00)

   

Net cash  96.100,00