Use the Following Information and the Indirect Method to Calculate

question 95

Multiple Choice

Use the following information and the indirect method to calculate the net cash provided or used by operating activities: Income before taxes…………………………………………… $14,000
Depreciation expense..………………………………………… 12,000
Payment on mortgage payable………………………………… 15,000
Gain on sale of land…………………………………………… 7,500
Increase in merchandise inventory……………………………. 2,050
Increase in accounts payable………………………………….. 6,150
Proceeds from sale of land……………………………………. 8,000
Income taxes paid……………………………………………... 1,700

• A) $12,700.
• B) $13,900.
• C) $20,900.
• D) $28,400.
• E) $35,900.

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Definitions:

Collections

The process of pursuing and receiving payments owed to a business from its customers or debtors.

Postage Stamps

Adhesive paper evidence for payment of postage, used to indicate that the postage fee for sending an item through the postal service has been paid.

Accountant

A professional who manages, audits, and analyzes financial records and transactions for individuals, businesses, and organizations.

Ledger

A-book or digital record that summarizes and categorizes all financial transactions of a business during an accounting period.