Reliance Corporation Has Provided the Following Information for the Year

question 75

Multiple Choice

Reliance Corporation has provided the following information for the year ended December 31,2019: • The equipment account balance increased $200,000.
• The equipment accumulated depreciation account balance increased $35,000.
• Equipment costing $50,000 was sold during the year resulting in a $10,000 gain.
• Depreciation expense recorded on the equipment during the year was $65,000.
Which of the following statements is correct with respect to determining cash flow from operating activities?

• A)Using the indirect method,net income is increased by the $30,000 increase in the accumulated depreciation account balance.
• B)Using the indirect method,net income is decreased by the $30,000 sales price of the equipment.
• C)Using the indirect method,net income is increased by the $65,000 depreciation expense.
• D)Using the indirect method,net income is increased by the $10,000 gain on the sale of the equipment.

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Definitions:

Halo Effect

A cognitive bias where one's overall impression of a person influences how they feel and think about the character's abilities or traits.

Locus Of Communication

The source or position from which communication originates, affecting its reception and interpretation.

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Groupthink

A psychological phenomenon where the desire for harmony in a decision-making group results in an irrational or dysfunctional decision outcome.