Karr, Inc. reported net income of \($300,000\) for 2008. Changes occurred in several balance sheet accounts as follows:

Additional Information: AICPA ADAPTED

a. During 2008 Karr sold equipment costing \($25,000\), with accumulated depreciation of \($12,000\), for a gain of $5,000.

b. In December 2008 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. In Karr’s 2008 statement of cash flows, calculate net cash provided by operating activities.
2. In Karr’s 2008 statement of cash flows, calculate net cash used in investing activities.

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