Parmesan Company Uses the Direct Method for Its Statement of Cash

question 14

Multiple Choice

Parmesan Company uses the direct method for its statement of cash flow. It reports the following information regarding the year 2014: From the income statement:
Sales Revenues, $265,000
Cost of Goods Sold, $210,000
Operating expenses, $31,000
From the balance sheet: On the statement of cash flows, what amount will be shown for collections from customers?

• A)$261,700
• B)$268,300
• C)$265,000
• D)$32,300

Calculate the value of perpetuities and understand their relevance.

Apply appropriate formulas to determine loan payments and outstanding balances.

Analyze cash flows to ascertain the value of an investment.

Understand and differentiate between various compounding frequencies and their impacts on investments and loans.

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Definitions:

Normal Good

A normal good is a type of good for which demand increases when income increases and decreases when income decreases, assuming all other factors remain constant.

Inferior Good

A type of good for which demand decreases as the income of individuals increases, conversely, its demand increases when consumer income declines.

Inferior Good

A type of good for which demand decreases as the income of consumers increases, contrasting with normal goods.

Normal Good

A good for which demand increases when consumer income rises, and decreases when consumer income falls.