Atkins Corporation has provided the following information for the year ended December 31, 2019:

The equipment account balance increased by $215,000 from the beginning of the year to the end of the year.

The equipment accumulated depreciation account balance increased by $36,500 from the beginning of the year to the end of the year.

Equipment costing $53,000 was sold during the year resulting in a $12,250 gain.

Depreciation expense recorded on the equipment during the year was $67,250.

Which of the following statements is incorrect with respect to preparation of the statement of cash flows? Assume that the equipment purchase and sale resulted in cash flows.

A $34,500 cash inflow is reported from the equipment sale.

Using the indirect method, net income is increased by the $67,250 depreciation expense.

Using the indirect method, net income is decreased by the $12,250 gain on the sale of the equipment.

A $65,250 cash inflow is reported from the equipment sale.