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

question 85

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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  Sales Revenue $291,300 Interest Revenue 1,000 Gain on Sale of Plant Assets 6,000 Total Revenues and Gains $298,300 Cost of Goods Sold 145,000 Salaries and Wages Expense 49,000 Depreciation Expense-Plant Assets 16,000 Other Operating Expense 25,000 Interest Expense 3,500 Income Tax Expense 7,800 Total Expenses 246,300 Net Income $52,000\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.

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

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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.

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