Jack's Shoes Has Net Income of $19,600 in 2018 and Owes

question 168

Multiple Choice

Jack's Shoes has net income of $19,600 in 2018 and owes $8,650 in taxes for the year. The company repaid $4,200 in loan principal and $650 in loan interest during the year. No new funds were borrowed. The depreciation expense is $420. What is the operating cash flow for the year?

• A) $10,720
• B) $19,370
• C) $20,670
• D) $28,670
• E) $29,320

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Definitions:

Prescribed Controls

Specific procedures and policies implemented by a company to safeguard its assets, ensure accurate financial reporting, and comply with laws and regulations.

Petty Cash Fund

A small amount of cash on hand used for paying expenses too small to merit writing a check.

Bank Checking Account

A bank account that allows for easy access to funds through checks, debit cards, and electronic transfers, used for managing daily transactions.

Internal Controls

Procedures and mechanisms established by a company to ensure the integrity of financial and accounting information, promote accountability, and prevent fraud.