Karr, Inc., reported net income of $300,000 for 20X1. Changes occurred in several balance sheet accounts as follows:

Additional Information:

a. During 20X1, Karr sold equipment costing $25,000, with accumulated depreciation of $12,000, for a gain of $5,000.

b. In December 20X1, Karr purchased equipment costing $50,000 with $20,000 cash and a 12% note payable of $30,000.

c. Depreciation expense for the year was $52,000.

Required:

1. Calculate net cash provided by operating activities in Karr’s 20X1 statement of cash flows.

2. Calculate net cash used in investing activities in Karr’s 20X1 statement of cash flows.

Transcribed Image Text:

Inventories Accounts receivable Accounts payable $20,000 decrease Equipment Accumulated depreciation Note payable $25,000 increase 40,000 increase 30,000 increase 15,000 increase 5,000 decrease