Use the following information and the indirect method to calculate the net cash provided or used by operating activities: Net income $ 85,800 Depreciation expense 12,500 Gain on sale of land 8,000 Increase in merchandise inventory 2,550 Increase in accounts payable 6,650

Cash provided  bY operating activities  = $94,400

Explanation:

Using the indirect method

Net Income                                           $85,800

Add :

Depreciation  expense                         $12,500

Increase in accounts payable                $6,650

Deduct :

Gain on sale of land                               ($8,000)

Increase in inventory                              ($2,550)

Cash provided  bY operating activities              $94,400

94,400

Explanation:

Cash flow from operating activities using the indirect method is calculated as follows

Statement of Cash Flow

                                                               Amount          Total

Income                                                    85,800  

Gain on sale of Land                         (8,000)  

Depreciation                                         12,500

Increase in inventory                         (2,550)  

Increase in accounts payable                6,650  

Cash flow from operating activities                            94,400

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