The Net Income Reported on the Income Statement for the Current

question 111

Multiple Choice

The net income reported on the income statement for the current year was $440,000. Depreciation was $62,000. Accounts receivable and inventories decreased by $20,000 and $32,000, respectively. Prepaid expenses and accounts payable increased, respectively, by $2,000 and $16,000. How much cash was provided by operating activities?

• A) $496,000.
• B) $568,000.
• C) $536,000.
• D) $436,000.

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Definitions:

Crowding-out

A phenomenon where increased government spending leads to a reduction in private sector spending and investment due to higher interest rates.

Aggregate Demand

The complete market appetite for all goods and services in an economy, assessed at a defined price level during a particular duration.

Medium of Exchange

An intermediary instrument used to facilitate the sale, purchase, or trade of goods between parties.

Federal Funds Rate

The interest rate at which depository institutions trade federal funds (balances held at Federal Reserve Banks) with each other overnight.