Adama Company Reported a Net Loss of $6,000 for the Year

question 39

Multiple Choice

Adama Company reported a net loss of $6,000 for the year ended December 31, 2017. During the year, accounts receivable increased $15,000, inventory decreased $12,000, accounts payable decreased by $20,000, and depreciation expense of $12,000 was recorded. During 2017, operating activities

• A) used net cash of $17,000.
• B) used net cash of $29,000.
• C) provided net cash of $24,000.
• D) provided net cash of $21,000.

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Definitions:

Present Value

The present calculation of a future monetary amount or series of cash inflows, using a particular return rate.

Cash Flows

The sum of all money transfers into and from a business, significantly altering its capacity to handle liquid assets.

Annuity

A financial product delivering fixed payments to an individual, typically over a period of time or for life, often used for retirement savings.

Sinking Fund

An arrangement to guarantee that funds are available to pay off a bond’s principal at maturity.