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

question 81

Multiple Choice

Alvez 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:

Net Operating Income

This represents the profit a company generates from its core business operations, excluding expenses from interest and taxes.

Price Reduction

A decrease in the selling price of goods or services, often used as a strategy to increase demand or sales volume.

Sales Forecast

An estimate of the amount of goods or services a company expects to sell in a future period.

Traceable Fixed Expense

A fixed cost that can be directly linked to a specific business segment or department.