(Appendix 14A) Last Year, Knox Corporation Reported on Its Income

question 14

Multiple Choice

(Appendix 14A) Last year, Knox Corporation reported on its income statement sales of $375,000 and cost of goods sold of $140,000. During the year, the balance in accounts receivable increased $30,000, the balance in accounts payable decreased $25,000, and the balance in inventory increased $10,000. The company uses the direct method to determine the net cash provided by (used in) operating activities on its statement of cash flows.
-Under the direct method,cost of goods sold adjusted to a cash basis would be:

• A) $105,000
• B) $125,000
• C) $175,000
• D) $155,000

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Definitions:

Flow of Goods

The movement of products from the place of production to the end consumer, including all the stages in between, such as warehousing and transportation.

Customer Service Factors

Elements that influence the quality of support and service provided to customers, including responsiveness, empathy, reliability, and communication.

Logistics System

The organized network of activities involved in moving resources, goods, and information from point of production to end users.

Supply Chain

A system of organizations, people, activities, information, and resources involved in moving a product or service from supplier to customer.