Mercury Corporation Reported the Following Information on Its Financial Statements

question 193

Multiple Choice

Mercury Corporation reported the following information on its financial statements: If the company uses the indirect method to prepare the operating activities section of the statement of cash flows, what amount will be reported as net cash inflow from operating activities for 2020?

• A)$171,000
• B)$215,000
• C)$245,000
• D)$183,000

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Definitions:

Manufacturing Overhead

All overhead costs related to the production process, apart from direct materials and direct labor expenses.

Adjusted Cost of Goods Sold

The cost of goods sold after adjustments for changes in inventory levels, returns, or allowances have been made.

Cost of Goods Available

The cost of goods available represents the total cost of inventory available for sale during a certain period, calculated as beginning inventory plus purchases minus ending inventory.

Schedule of Cost

A detailed report showing the breakdown of the cost components including materials, labor, and overhead for a project or production process.