The Net Income Reported on the Income Statement for the Current

question 4

Multiple Choice

The net income reported on the income statement for the current year was $200,000. Depreciation recorded on plant assets was $38,000. Accounts receivable and inventories increased by $2,000 and $8,000, respectively. Prepaid expenses and accounts payable decreased by $1,000 and $11,000, respectively. Using the indirect method, how much would be reported for net cash flows from operating activities in the statement of cash flows?

• A) $180,000
• B) $200,000
• C) $218,000
• D) $238,000

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Definitions:

Sales

The revenue earned from selling goods or services over a period of time.

Useful Information

Data or facts that are accurate, timely, and relevant, enabling effective decision-making or action.

Constraint

A constraint refers to a limitation or restriction that affects the planning, execution, or outcome of a project or process.

Accounting

The systematic process of recording, summarizing, and analyzing financial transactions of a business.