The Accounting Records of Snapdog Enterprises Include the Following Information

question 5

Multiple Choice

The accounting records of Snapdog Enterprises include the following information: $\begin{array}{lrr}&\text { December } 31 \text {, }\\&2013&2014\\\text { Accounts payable } & \$ 12,800 & \$ 13,200 \\\text { Accounts receivable } & 24,000 & 21,700\end{array}$
$\text { The company's income statement for } 2014 \text { appears below. }$
$\begin{array}{lr}\text { Sales } & \$ 280,000 \\\text { Cost of goods sold } & 150,000 \\\text { Depreciation expense } & 15,000 \\\text { Other operating expenses } & 68,000 \\\text { Loss on sale of plant asset } & 10,200 \\\text { Income taxes } & 24,000 \\\text { Net income } & \$ 12,800\end{array}$ What amount of net cash provided by operating activities will Snapdog Enterprises report for 2014 using the indirect method?

• A) $35,300
• B) $25,900
• C) $36,100
• D) $39,900

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Definitions:

Allowance for Doubtful Accounts

An accounting provision made for accounts receivable that may not be collectable.

Accounts Receivable

Funds that a company's clients have not yet paid for products or services that have already been provided to them.

Allowance Method

An accounting technique that estimates and sets aside a portion of a company's receivables as uncollectable, acknowledging potential credit losses.

Uncollectible Account Receivable

An uncollectible account receivable is a debt owed to a company that it is unable to collect, typically leading to its classification as a bad debt expense.