During the Year,Samuels Company Reported Net Income of $300,000,including Amortization

question 46

Multiple Choice

During the year,Samuels Company reported net income of $300,000,including amortization of intangible assets of $66,000,depreciation of plant assets of $132,000,and amortization of premium on investment in bonds of $20,000.Applying the indirect method,cash provided by operating activities is what amount?

• A) $300,000
• B) $518,000
• C) $478,000
• D) $498,000

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Definitions:

Contribution Margin Ratio

A financial metric that shows the percentage of sales revenue that exceeds variable costs, indicating how much revenue contributes to fixed costs and profit.

Break-Even Point

The point where total costs and total revenues are equal, leading to no profit or loss from production or sales.

Fixed Costs

Costs such as rent, salaries, and insurance are invariant, unaffected by the quantity of production or sales.

Cost Volume Profit Analysis

A financial analysis method used to determine how changes in costs and volume affect a company's operating income and net income.