Alex Company Prepares Its Statement of Cash Flows Using the Direct

question 128

Multiple Choice

Alex Company prepares its statement of cash flows using the direct method for operating activities. For the year ended December 31, 2015, Alex Company reports the following activity: $\begin{array}{lr}\text { Sales on account } & \$ 1,400,000 \\\text { Cash sales } & 740,000 \\\text { Decrease in accounts receivable } & 610,000 \\\text { Increase in accounts payable } & 72,000 \\\text { Increase in inventory } & 48,000 \\\text { Cost of qood sold } & 1,050,000\end{array}$ What is the amount of cash collections from customers reported by Alex Company for the year ended December 31, 2015?

• A) $2,140,000
• B) $2,010,000
• C) $2,750,000
• D) $1,530,000

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Definitions:

Payoffs

The outcomes or returns from an action or investment, often used in the context of games and financial investments.

Dominant Strategy

A strategy in game theory that always results in the best payoff for a player, regardless of what the opposing players do.

Sponsor

An individual or organization that provides support, usually financial, for an event, activity, person, or organization.

Marathon

A long-distance running race with an official distance of 42.195 kilometers or about 26.2 miles.