Alvez Reports Net Income of $305,000 for the Year Ended

question 10

Multiple Choice

Alvez reports net income of $305,000 for the year ended December 31.It also reports $93,700 depreciation expense and a $10,000 loss on the sale of equipment.Its comparative balance sheet reveals a $40,200 increase in accounts receivable,a $10,200 decrease in prepaid expenses,a $15,200 increase in accounts payable,a $12,500 decrease in wages payable,a $75,000 increase in equipment,and a $100,000 decrease in notes payable.Calculate the net increase in cash for the year.

• A)$216,400.
• B)$281,400.
• C)$381,400.
• D)$206,400.
• E)$406,400.

Understand the concept of dividend policy in terms of target payout ratio and its effect on the firm's capital structure.

Know stock splits and their implications on shareholders' equity and stock price.

Understand the importance and components of an effective intervention contract.

Recognize the significance of clarity in setting good objectives.

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Definitions:

Declaration Date

The specific date on which a company's board of directors announces its next dividend payment or stock dividend.

Legal Obligation

A duty enforced by law, requiring an entity or individual to perform or refrain from performing a certain action.

Date of Record

The date set by a corporation upon which the shareholders must be registered to be eligible to receive dividends or participate in corporate voting.

Common Stock

A type of equity security that represents ownership in a corporation, with holders having a claim on part of the company's assets and earnings.