Avatar Company Uses the Indirect Method to Prepare Its Statement

question 98

Multiple Choice

Avatar Company uses the indirect method to prepare its statement of cash flows. Refer to the following information for the year 2015: Net cash provided by operating activities: $102,000
Net cash used in investing activities: $(113,500)
Net cash provided by financing activities: $15,000
If the cash balance at the beginning of the year was $13,000, what would be the ending cash balance?

• A)$16,500
• B)$3,500
• C)$13,000
• D)$10,500

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Definitions:

Conversion Costs

The combined cost of direct labor and manufacturing overhead involved in transforming materials into finished goods.

Equivalent Units

A concept in cost accounting used to calculate the number of complete units that could have been produced given the total amount of raw materials and effort expended.

Total Materials Costs

The sum of all costs associated with the materials required to manufacture a product.

Work In Process Inventories

Inventories that represent goods that are partially completed in a manufacturing process.