Exhibit 12-4
Manning Company Uses the Indirect Method to Prepare $\bullet$

question 38

Multiple Choice

Exhibit 12-4
Manning Company uses the indirect method to prepare the statement of cash flows.The following amounts are shown in its December 31,2013,financial statements.

-The following information is from the noncurrent asset portion of Randle Company's balance sheet.

The following activities occurred during 2013:
$\bullet$ Sold equipment with an original cost of $8,000 and a book value of $2,500 for $2,000 cash.
$\bullet$ Depreciation expense for the year totaled $18,000.
$\bullet$ Purchased property for $23,000 cash.
$\bullet$ Purchased long-term investments for $12,000 cash.
What is the amount of cash used by investing activities?

• A)$27,000
• B)$51,000
• C)$33,000
• D)$14,500
• E)None of the answer choices is correct.

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Definitions:

Design Capacity

The theoretical maximum output of a system in a given period under ideal conditions.

Theoretical Maximum

The highest possible outcome or performance level under ideal conditions with no constraints or limitations.

Rated Capacity

The maximum amount of output or processing that a machine, system, or facility can consistently achieve under normal conditions.

Expected Output

The anticipated result, product, or performance that is planned to be achieved under specific conditions.