Creble Company Reported Net Income for 2018 in the Amount

question 92

Multiple Choice

Creble Company reported net income for 2018 in the amount of $40,000. The company's financial statements also included the following: $\begin{array}{lll}\text {Increase in accounts receivable }&\$4,000\\\text {Decrease in inventory }&2,000\\\text {Depreciation expense }&3,000\\\text {Gain on sale of equipment }&5,000\\\end{array}$
In the statement of cash flows what is net cash provided by operating activities under the indirect method?

• A) $36,000.
• B) $41,000.
• C) $40,000.
• D) $38,000.

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Definitions:

Loss

When a company's expenses exceed its revenues during a specific period, resulting in negative profit.

Operating Expenses

Ongoing costs for running a business that are not directly associated with the production of goods or services, such as rent, utilities, and salaries.

Current Assets

Resources anticipated to be turned into cash, sold off, or used up either within a year or over the span of the business's operational cycle, depending on which period extends further.

Research and Development

The process of innovating and improving products or services through scientific investigation, experimentation, and technological advancement.