McDaniel,Inc

question 29

Multiple Choice

McDaniel,Inc.uses the direct method to prepare its statement of cash flows.Refer to the following financial statement information for the year ended December 31,2017:


Use the direct method to compute the payments made to employees.(Accrued Liabilities relate to other operating expense. )

• A)$69,400
• B)$42,400
• C)$23,000
• D)$46,400

---

Definitions:

Direct Method

An approach to cash flow statement preparation that lists major classes of gross cash receipts and payments.

Depreciation Expense

The allocated portion of the cost of a tangible asset over its useful life, reflecting wear and tear.

Operating Activities

Activities that are directly related to running a business and generating revenue, such as sales and purchasing materials.

Operating Expenses

Costs associated with running a business's core operations, excluding the cost of goods sold.