Morgan Company Reported the Following Items in 2012 Required:
Calculate the Following:
(1) Net Cash Provided by Operating

Morgan Company reported the following items in 2012:
$\begin{array}{|l|l|}\hline \text { Net income } & \$ 40,000 \\\hline \text { Dividends paid } & 5,000 \\\hline \text { Increase in accounts receivable } & 10,000 \\\hline \text { Increase in accounts payable } & 7,000 \\\hline \text { Purchase of equipment (capital expenditure) } & 8,000 \\\hline \text { Depreciation expense } & 4,000 \\\hline \text { Issue of notes payable } & 20,000 \\\hline &\end{array}$
Required:
Calculate the following:
(1) net cash provided by operating activities,
(2) the net change in cash during 2012, and
(3) free cash flow.

Correct Answer:

Verified

(1)
(3) Free Cash Flow = $41...

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