Bright Eyes Paints Company Uses the Direct Method for Preparing

question 147

Multiple Choice

Bright Eyes Paints Company uses the direct method for preparing its statement of cash flow. Bright Eyes reports the following information regarding 2017: From the income statement:
Sales Revenues, $266,000
Cost of Goods Sold, $213,000
Operating Expenses, $36,000
Net Income $17,000
From the balance sheet: Assume that there were no sales of long-term assets, no interest revenue, and no expenses other than the expenses shown above. Also, assume that Accounts Payable are for purchases of merchandise inventory only. What amount will be shown for the net cash flow from operating activities?

• A) $61,700
• B) $23,600
• C) $17,000
• D) $10,400

Learn the impact of foreign operations on financial statement preparation and translation.

Understand the basic accounting equation and how various transactions affect it.

Distinguish between assets, liabilities, and equity and their roles in the accounting equation.

Identify the effects of revenue, expenses, and withdrawals on a company's financial position.

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Definitions:

Visceral Pericardium

Serous membrane covering the surface of the heart; also called epicardium.

Epicardium

Serous membrane covering the surface of the heart; also called visceral pericardium.

Pericardial Fluid

Viscous fluid contained within the pericardial cavity between the visceral and parietal pericardium; functions as a lubricant.

Heart Valves

Structures within the heart that maintain unidirectional flow of blood by opening and closing depending on the pressure differential.