In Preparing a Company's Statement of Cash Flows for the Most

question 59

Multiple Choice

In preparing a company's statement of cash flows for the most recent year using the indirect method, the following information is available: $$\begin{array} { l | r } \text { Net income for the year was } & \$ 52,000 \\\hline \text { Accounts payable increased by } & 18,000 \\\hline \text { Accounts receivable decreased by } & 25,000 \\\hline \text { Inventories increased by } & 5,000 \\\hline \text { Depreciation expense was } & 30,000\end{array}$$ Net cash provided by operating activities was:

• A)$60,000.
• B)$70,000.
• C)$130,000.
• D)$80,000.
• E)$120,000.

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Definitions:

Capital Gains

The profit earned from the sale of an asset or investment, which is the difference between the selling price and the purchase price.

Marginal Tax Rates

The rate at which an individual's or entity's additional income is taxed.

Total Tax

The aggregate amount of taxes owed by an individual or corporation, including federal, state, local, and other applicable taxes.

Provincial Tax Brackets

Tax levels set by provincial governments, where income tax rates vary based on the income bracket a taxpayer falls into.