Royal Corporation Uses the Indirect Method of Computing Net Cash

question 179

Multiple Choice

Royal Corporation uses the indirect method of computing net cash flow from operating activities and reported the following for 2009: accounts receivable decreased by $10,300, merchandise inventory increased by $15,300, accounts payable decreased by $4,000, and income taxes payable increased by $18,800. If Royal Corporation reported net income for 2009 of $157,800 (including $34,800 of depreciation expense) , net cash flow from operating activities for 2009 is:

• A) $202,400.
• B) $132,800.
• C) $164,800.
• D) $221,700.

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Definitions:

Arbitration

A method of dispute resolution where an impartial third party (the arbitrator) makes a decision to resolve the issue, which is usually binding on the parties.

Law

A system of rules that are created and enforced through social or governmental institutions to regulate behavior.

Discrimination

Unjust or prejudicial treatment of different categories of people, especially on the grounds of race, age, or sex.

Arbitration Clause

A contract provision that requires disputes arising out of the contract to be resolved through arbitration rather than through the court system.