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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.

Differentiate between excludable and nonexcludable goods.

Differentiate between rival and nonrival goods.

Recognize examples of common resources and understand why they are considered as such.

Recognize examples of private goods and understand why they are considered as such.

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