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Wellington Inc -On Wellington's Statement of Cash Flows, Using the Direct Method

question 85

Multiple Choice

Wellington Inc. uses the direct method to prepare its statement of cash flows. Refer to the following financial statement information for the year ended December 31, 2015: $Wellington Inc. uses the direct method to prepare its statement of cash flows. Refer to the following financial statement information for the year ended December 31, 2015: \begin{array} { l r r } \text { Sales Revenue } & \$ 291,300 \\ \text { Interest Revenue } & 1,000 \\ \text { Gain on Sale of Plant Assets } & 6,000 \\ \text { Total Revenues and Gains } && \$ 298,300 \\ \text { Cost of Goods Sold } & 145,000 \\ \text { Salaries and Wages Expense } & 49,000 \\ \text { Depreciation Expense-Plant Assets } & 16,000 \\ \text { Other Operating Expense } &25,000 \\ \text { Interest Expense } &3,500 \\ \text { Income Tax Expense } & \underline{7,800}& \\ \text { Total Expenses } & &\underline{ 246,300} \\ \text { Net Income } & &\underline{\$ 52,000} \\ \hline \end{array} -On Wellington's statement of cash flows, using the direct method, what amount will be shown for total net cash flow from operating activities? Assume Accrued Liabilities relate to Other Operating Expense. A) $(58,000) B) $42,000 C) $(42,000) D) $58,000$ $\begin{array} { l r r } \text { Sales Revenue } & \$ 291,300 \\\text { Interest Revenue } & 1,000 \\\text { Gain on Sale of Plant Assets } & 6,000 \\\text { Total Revenues and Gains } && \$ 298,300 \\\text { Cost of Goods Sold } & 145,000 \\\text { Salaries and Wages Expense } & 49,000 \\\text { Depreciation Expense-Plant Assets } & 16,000 \\\text { Other Operating Expense } &25,000 \\\text { Interest Expense } &3,500 \\\text { Income Tax Expense } & \underline{7,800}& \\\text { Total Expenses } & &\underline{ 246,300} \\\text { Net Income } & &\underline{\$ 52,000} \\\hline\end{array}$
-On Wellington's statement of cash flows, using the direct method, what amount will be shown for total net cash flow from operating activities? Assume Accrued Liabilities relate to Other Operating Expense.

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Inflation Rate

The percentage increase in the general level of prices for goods and services over a period.

U.S. Exports

Goods, services, and technologies sold and shipped by the United States to other countries, contributing to the nation's income and employment.

Dollar Appreciates

An increase in the value of the US dollar relative to other currencies in the global foreign exchange markets.

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A period of leisure time spent traveling or staying in countries within Europe, often characterized by visits to cultural sites, historical landmarks, and natural attractions.