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Which of the following should be deducted from net income in calculating net cash flow from operating activities using the indirect method?a. Depreciation expense.b. A loss on the sale of equipment.c. Dividends declared and paid.d. Gain on sale of land.

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Answer:

d. Gain on sale of land

Explanation:

When using the indirect method  in calculating net cash flow from operating activities, the net income is adjusted by the following items :

  1. Non-Cash flow items included in net income
  2. Changes in Working Capital items in net income.

From the choices given only gain from sale on land which is an income, has to be removed from net income to reach a cash flow figure.