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

question 64

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

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Definitions:

Securities And Exchange Commission

A federal agency responsible for regulating the securities industry, enforcing federal securities laws, and protecting investors in the United States.

Socialize Losses

The process where financial losses are distributed broadly across society or a large group, rather than being borne solely by the entity responsible for incurring them.

Imprudent Investment

Financial allocations or commitments made without proper judgment or care, often leading to significant losses or suboptimal financial performance.

Public Choice Theory

An economic theory that studies how public sector decisions are made, considering individuals in the public sector as self-interested agents and applying the tools of economics to political science.