A Corporation Prepares Its Statement of Cash Flows Using the Indirect

question 102

Multiple Choice

A corporation prepares its statement of cash flows using the indirect method to report operating activities.Net income for the 2014 fiscal year was $634,000.Depreciation and amortization expense of $60,000 and $30,000 respectively were included with operating expenses in the income statement.The following information describes the changes in current assets and liabilities other than cash: Determine the net cash flow provided (used) by operating activities.

• A)($692,500)
• B)$692,500
• C)$723,700
• D)($536,300)
• E)($723,700)

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Definitions:

Gross Earnings

The total amount earned by an individual or a company before any deductions or taxes are applied.

Deposit Rules

Regulations governing the placement of money into banking or investment accounts.

Reconcile

The process of making one view or belief compatible with another, or of restoring friendly relations.

Mature

Having reached a stage of full development or growth, often characterized by a higher level of wisdom, experience, or sophistication.