Albers Enterprises Uses the Direct Method When Preparing Its Statement

question 4

Multiple Choice

Albers Enterprises uses the direct method when preparing its statement of cash flows. Albers sold equipment with a book value of $51,000 at a gain of $7,000. The amount to be reported on the statement of cash flows under "proceeds from the sale of plant assets" is:

• A)$44,000.
• B)$ 7,000.
• C)$58,000.
• D)$51,000.

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Definitions:

FOH Volume Variance

The difference between the budgeted fixed overhead and the applied fixed overhead, which is attributed to the difference in actual and budgeted activity levels.

FOH Budget Variance

The difference between the actual and budgeted factory overhead costs over a certain period, indicating under or overspending.

Work in Process

Inventory that includes materials that have begun the production process but are not yet completed products.

Retained Earnings

The accumulated net income of a company that is retained by the company rather than distributed to shareholders as dividends.