The Statements of Financial Position for King Lear Corp

question 30

Multiple Choice

The statements of financial position for King Lear Corp. at the end of 2020 and 2019 are as follows: During 2020, land was acquired in exchange for common shares (which had a market value of $ 150,000 at the time) . All equipment purchased was for cash. Equipment costing $ 15,000 was sold for $ 6,000 cash; book value of the equipment at the time of sale was $ 12,000, and the loss was included in net income. Cash dividends of $ 30,000 were declared and paid during the year. King adheres to ASPE and uses the indirect method when preparing the statement of cash flows. The cash provided by operating activities for calendar 2020 was

• A) $ 72,000.
• B) $ 78,000.
• C) $ 84,000.
• D) $ 99,000.

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Definitions:

Isocost Line

A graphical representation in economics showing all combinations of inputs that have the same total cost.

Price of Capital

The cost of using financial assets for production, often reflected in interest rates or rents.

Total Cost

The combined total of expenditures related to the creation of goods or the provision of services, covering both stable and changeable costs.

Price of Labor

The wage rate or compensation paid to employees for their work or services, often determined by market forces, skill levels, and economic conditions.