Monroe Corporation Reported a Decrease in Inventories of $30,000 and a Decrease

question 92

Multiple Choice

Monroe Corporation reported a decrease in inventories of $30,000 and a decrease in accounts payable of $15,000.Cost of goods sold totaled $110,000.Monroe uses the direct method to determine the net cash provided by operating activities on the statement of cash flows.What is the cost of goods sold adjusted to a cash basis?

• A)$65,000
• B)$105,000
• C)$95,000
• D)$155,000

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Definitions:

Cash Receipts

The total amount of money received by a business during a specific period.

Interest and Dividends

Income received from investments, with interest earned on debt investments and dividends received from equity investments.

Operating Activities

Tasks and transactions directly related to the primary business functions of providing goods or services to customers.

Statement of Cash Flows

A financial statement that compiles total data about every cash inflow a business gets from its operational activities and external funding sources, in addition to all cash outflows that cover the costs of business operations and investments in a specified timeframe.