Interest Expense for 2016 Is $300,000

question 79

Multiple Choice

Interest Expense for 2016 is $300,000.Interest Payable increased $50,000 during the year.Interest Receivable increased $10,000 during the year.Interest Expense includes $50,000 for the amortization of discount.What is the cash paid for interest?

• A)$200,000
• B)$250,000
• C)$300,000
• D)$350,000

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Definitions:

Direct Method

A method of preparing the cash flow statement where actual cash flows from operating activities are listed, as opposed to the indirect method which adjusts net income for non-cash transactions.

Net Cash Provided

The amount of cash generated through a company's operations, after accounting for outflows and inflows.

Prepaid Expenses

Costs paid for in advance of receiving the benefit, such as insurance or rent, which are recorded as assets initially.

Free Cash Flow

The amount of cash a company generates after accounting for capital expenditures, indicating the ability to repay creditors or pay dividends and interest to investors.