Calculate Net Cash Flow from Operating Activities If A)$19,000
B)$29,000

question 2

Multiple Choice

Calculate net cash flow from operating activities if: $$\begin{array}{l}\text { Statement of financial performance (extract) }\\\begin{array} { l r r } \text { Sales (credit) } & \$ 80,000 & \\\text { Less Expenses (cash) } & \$ 48,000 & \\ { \text { Profit } } & \$ 32,000 & \\& & \\\text { Ledger account (extract) } & & \\& \text { Start of } & \text { End of } \\& \text { Period } & \text { Period } \\& & \\\text { Accounts } & & \\\text { Receivable } &\$ 6,000 & \$ 9,000\end{array}\end{array}$$

• A)$19,000.
• B)$29,000.
• C)$25,000.
• D)$22,000.

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Definitions:

Perpetual Inventory System

The inventory system in which each purchase and sale of merchandise is recorded in the inventory account and related subsidiary ledger; therefore, the inventory records are updated continuously.

Conversion Cost

The combined cost of direct labor and manufacturing overheads which are incurred to convert raw materials into finished goods.

Direct Materials

Initial materials specifically allocated for the making of certain goods or provision of services.

Factory Overhead

Indirect manufacturing costs not directly associated with the production of goods, such as depreciation of equipment, maintenance, and utilities.