The Net Income Reported on the Income Statement for the Current

question 175

Multiple Choice

The net income reported on the income statement for the current year was ¥2,750,000. Depreciation recorded on plant assets was ¥380,000. Accounts receivable and inventories increased by ¥20,000 and ¥80,000, respectively. Prepaid expenses and accounts payable decreased by ¥10,000 and ¥110,000 respectively. How much cash was provided by operating activities?

• A) ¥2,550,000
• B) ¥2,930,000
• C) ¥2,750,000
• D) ¥3,090,000

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Definitions:

Net Income

The amount of profit that remains after all operating expenses, taxes, and costs have been subtracted from total revenue, essentially the bottom line.

Break-Even Point

The point at which total costs and total revenue are equal, resulting in neither profit nor loss.

Fixed Costs

Expenses that do not change with the volume of production or sales, such as rent, salaries, and insurance.

Variable Cost

A cost that varies with the level of output or activity, in contrast to fixed costs, which remain constant regardless of activity.