The Net Income Reported on the Income Statement for the Current

question 115

Multiple Choice

The net income reported on the income statement for the current year was $250,000.Depreciation recorded on fixed assets and amortization of patents for the year were $40,000 and $9,000,respectively.Balances of current asset and current liability accounts at the end and at the beginning of the year are as follows: $\begin{array}{l}\begin{array}{lll}\\\text { Cash}\\\text { Accounts receivable}\\\text { Inventories}\\\text { Prepaid expenses}\\\text { Accounts payable merchandise creditors}\\\end{array}\begin{array}{lll}\underline { \text { End}}\\\$ 50,000 \\112,000 \\105,000 \\4,500 \\75,000\end{array}\begin{array}{lll}\underline { \text { Beginning}}\\\$ 60,000 \\108,000 \\93,000 \\6,500 \\89,000\end{array}\end{array}$
What is the amount of cash flows from operating activities reported on the statement of cash flows prepared by the indirect method?

• A)$271,000
• B)$279,000
• C)$327,000
• D)$256,000

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Definitions:

Large Denomination

References currency or financial instruments issued in large nominal amounts, often used in high-value transactions.

M2

A measure of the money supply that includes cash, checking deposits, and easily convertible near money, such as savings deposits, money market securities, and other time deposits.

Money Market

A sector of the financial market where short-term borrowing, lending, buying, and selling with original maturities of one year or less occur.

Small Denomination

Refers to currency or financial instruments that are issued in low nominal values, making them accessible for small transactions or savings.