In Preparing a Company's Statement of Cash Flows for the Most

question 220

Short Answer

In preparing a company's statement of cash flows for the most recent year using the indirect method, the following information is available:
1.
$\begin{array}{ll}\text { Net income for the year was } & \$ 52,000 \\\hline \text { Accounts payable decreased by } & \$ 18,000 \\\hline \text { Accounts receivable increased by } & \$ 25,000 \\\hline \text { Inventories increased by } & \$ 5,000 \\\hline \text { Cash dividends paid were } & \$ 14,000 \\\hline \text { Depreciation expense was } & \$ 20,000\end{array}$

Net cash provided by operating activites was:
A) $\$ 120,000$ .
B) $\$ 70,000$ .
C) $\$ 110,000$
D) $\$ 24,000$ .
E) $\$ 71,000$

• A) \(\$ 120,000\).
• B) \(\$ 70,000\).
• C) \(\$ 110,000\)
• D) \(\$ 24,000\).
• E) \(\$ 71,000\)

---

Definitions:

Dealer Appliance Outlet

A retailer specializing in the sale of appliances, typically offering products from various manufacturers.

Statute of Frauds

A legal principle requiring certain contracts to be in writing and signed to be enforceable, including those for the sale of land or goods above a certain value.

Usage of Trade

Established customs and practices in a particular industry or market that are widely accepted and used by parties in commercial transactions.

Baker's Dozen

A quantity of thirteen, traditionally used to ensure buyers received good value, originating from bakers adding an extra item to a dozen.