Question

Use the following information and the indirect method to calculate the net cash provided or used by operating activities: Net income $ 86,600 Depreciation expense 13,300 Gain on sale of land 7,000 Increase in merchandise inventory 3,350 Increase in accounts payable 7,450 Multiple Choice $15,350. $38,000. $97,000. $31,000. $16,350.

Answer 1

Answer:

The correct answer is $97,000.

Explanation:

According to the scenario, the computation of the given data are as follows:

We can calculate the net cash provided by using the following formula:

Net cash = Net income + Depreciation expense - Gain on sale of land - Increase in merchandise inventory + Increase in accounts payable

By putting the following value in the formula, we get

Net Cash = $86,600 + $13,300 - $7,000 - $3,350 + $7,450

= $97,000

Hence, the net cash provided is $97,000.