Felix Skateboards Company Uses the Indirect Method to Prepare the Statement

question 24

Multiple Choice

Felix Skateboards Company uses the indirect method to prepare the statement of cash flows. Refer to the following income statement: Additional information provided by the company includes the following: 1. Current assets, other than cash, increased by $21,000.
2) Current liabilities decreased by $1,500.
Compute the net cash provided by (used for) operating activities.

• A) $26,200
• B) $40,200
• C) $34,700
• D) $12,500

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Definitions:

Implicit Costs

The opportunity costs of using resources owned by the firm for its own production, instead of earning income elsewhere.

Explicit Costs

Direct, out-of-pocket payments made for the operation of a business, such as wages, rent, and materials.

Accounting Profits

The difference between total revenues and explicit costs, representing the net income reported on a company's financial statements.