A Corporation Prepares Its Statement of Cash Flows Using the Indirect

question 39

Multiple Choice

A corporation prepares its statement of cash flows using the indirect method to report operating activities.Net income for the 2014 fiscal year was $634,000.Depreciation and amortization expense of $60,000 and $30,000 respectively were included with operating expenses in the income statement.The following information describes the changes in current assets and liabilities other than cash:
$$\begin{array} { l r } \text { Decrease in accounts receivable } & \$ 22,000 \\\text { Increase in inventories } & 9,400 \\\text { Increase prepaid expenses } & 8,900 \\\text { Increase in salaries payable } & 10,400 \\& \\\text { Decrease in income taxes payable } & 14,400\end{array}$$
Determine the net cash flow provided (used) by operating activities.

• A) ($692,500)
• B) $692,500
• C) $723,700
• D) ($536,300)
• E) ($723,700)

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Definitions:

Behind The Scenes

Actions, processes, or operations that occur out of public view, often in preparation or support of a main activity, product, or event.

Stakeholders

Stakeholders are individuals, groups, or organizations that are affected by or can affect the outcomes of a company's actions, objectives, and policies, including employees, customers, suppliers, and community members.

Creating Value

Involves offering products or services that are perceived as beneficial and superior by consumers, enhancing their satisfaction and experience.

Marketing

The process of identifying, anticipating, and satisfying customer needs and desires through the creation, promotion, selling, and distribution of products or services.