Gregor Company Reports Net Income of $305,000 for the Year

question 148

Multiple Choice

Gregor Company reports net income of $305,000 for the year ended December 31.It also reports $93,700 depreciation expense and a $10,000 loss on the sale of equipment.Its comparative balance sheet reveals a $40,200 increase in accounts receivable,a $10,200 decrease in prepaid expenses,a $15,200 increase in accounts payable,a $12,500 decrease in wages payable,and a $100,000 decrease in notes payable.Calculate the cash provided (used) in operating activities using the indirect method.

• A)$461,800.
• B)$371,400.
• C)$381,400.
• D)$351,000.
• E)$361,000.

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Definitions:

Systematic Risk Factors

External risks that affect an entire market or asset class, and cannot be mitigated through diversification.

CAPM

Capital Asset Pricing Model; a model that describes the relationship between risk and expected return and that is used in the pricing of risky securities.

Arbitrage Pricing Theory

A financial model that estimates the price of securities by considering the relationship between their expected returns and macroeconomic factors.

Single Market Index

An index that measures the performance of a specific market segment or region.