Use the following information and the indirect method to calculate the net cash provided or used by operating activities: $$\begin{array} { | l | r | }
\hline \text { Net incorne } & \$ 12,300 \
\hline \text { Depreciation expense } & 12,000 \
\hline \text { Payment on mortgage payable } & 15,000 \
\hline \text { Gain on sale of land } & 7,500 \
\hline \text { Increase in merchardise inventory } & 2,050 \
\hline \text { Increase in accourts payable } & { 6 , 1 5 0 } \
\hline \text { Proceeds from sale of land } & { 8 , 0 0 0 } \
\hline
\end{array}$$

Question

Use the following information and the indirect method to calculate the net cash provided or used by operating activities: $$\begin{array} { | l | r | } 
\hline \text { Net incorne } & \$ 12,300 \
\hline \text { Depreciation expense } & 12,000 \
\hline \text { Payment on mortgage payable } & 15,000 \
\hline \text { Gain on sale of land } & 7,500 \
\hline \text { Increase in merchardise inventory } & 2,050 \
\hline \text { Increase in accourts payable } & { 6 , 1 5 0 } \
\hline \text { Proceeds from sale of land } & { 8 , 0 0 0 } \
\hline
\end{array}$$

Quizplus · Accepted Answer

The net cash provided by operating activities is calculated as follows: Start with net income ($12,300), add back non-cash expenses like depreciation ($12,000), subtract gains on sales ($7,500), adjust for changes in working capital (subtract increase in inventory $2,050, add increase in accounts payable $6,150). This results in $20,900.

Use the Following Information and the Indirect Method to Calculate