Toga Corporation Reported Profit of $50,000 for the Year

question 103

Multiple Choice

Toga Corporation reported profit of $50,000 for the year. During the year, trade receivables increased by $8,000, trade payables decreased by $4,000 and depreciation expense of $6,000 was recorded. Net cash provided by operating activities for the year, using the indirect method, is

• A) $54,000.
• B) $44,000.
• C) $50,000.
• D) $56,000.

---

Definitions:

Economic Sacrifices Approach

A method in accounting that focuses on recognizing and measuring the sacrifices or costs that a company incurs in the process of generating revenue.

Input Market

The market in which firms purchase raw materials, labor, services, and other inputs necessary for the production of goods or services.

Salvage Value

The estimated resale value of an asset at the end of its useful life.

Expected Benefit Approach

A method used in actuarial science and finance to calculate the anticipated benefits and corresponding costs or contributions to a pension plan over time.