3.Use the following income statement and information about selected current assets and current liabilities to calculate the net cash provided or used by operating activities using the indirect method. Use the template on the next page. Hint: Add back loss on sale of land. Check: Net cash provided by operating activities should be a number greater than $38,000 but less than $41,000. (5 points)

National L Corporation

Income Statement

For Year Ended December 31, 2018

Sales

$180,000

Cost of goods sold

104,000

Gross profit from sales

$76,000

Operating expenses:

Salaries and wages expense

$25,000

Depreciation expense

8,000

Rent expense

6,200

Interest expense

1,900

41,100

Income from operations

$34,900

Loss on sale of land

3,000

Net income

$31,900

Selected beginning and ending balances of current asset and current liability accounts, all of which relate to operating activities, are as follows:

Balance

Dec. 31, 2018

Dec. 31, 2017

Accounts receivable

$27,600

$24,000

Merchandise inventory

22,000

20,000

Prepaid insurance

500

400

Accounts payable

27,000

26,000

Salaries and wages payable

10,400

9,000

Interest payable

300

200

Response to P3.

Cash flows from operating activities

Net Income

Adjustments to reconcile net income to net cash provided by operating activities: (list each and amount)

Net cash provided by operating activities