Avatar Company Uses the Indirect Method to Prepare the Statement

question 44

Essay

Avatar Company uses the indirect method to prepare the statement of cash flows. Refer to the following income statement: Additional information provided by the company includes the following:
Current assets other than cash increase by $36,000.
Current liabilities decrease by $1,500.
Prepare the operating activities section of the statement of cash flows.

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Definitions:

Weak Axiom

In consumer theory, it refers to the consistency of consumer choice behavior under the assumption of non-increasing preferences.

Profit-maximizing Behavior

An economic principle where businesses seek to achieve the highest possible profit from their operations.

Short-run Production Function

The short-run production function describes the relationship between input and output levels when at least one input (like capital) is fixed and cannot be changed immediately.

Variable Factor

An input in the production process that can be changed in the short term to influence output.