Mason Corporation Reported a Net Loss of $12,000 for the Year

question 85

Multiple Choice

Mason Corporation reported a net loss of $12,000 for the year ended December 31, 2013. During the year, accounts receivable decreased $5,000, merchandise inventory increased $4,000, accounts payable increased by $13,000, and depreciation expense of $7,000 was recorded. During 2013, operating activities using the indirect method

• A) provided net cash of $9,000.
• B) used net cash of $23,000.
• C) used net cash of $33,000.
• D) provided net cash of $7,000.

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Definitions:

Production Costs

The total expenses incurred in the manufacture of a product, including raw materials, labor, and overhead.

Economic Profits

The surplus left after deducting both explicit and implicit costs from total revenues.

Savings Account

A deposit account held at a bank or other financial institution that provides principal security and a modest interest rate.

Interest Rate

The cost of borrowing money or the return on investment expressed as a percentage, typically on an annual basis.