Last Year, Knox Corporation Reported on Its Income Statement Sales

question 3

Multiple Choice

Last year, Knox Corporation reported on its income statement sales of $375,000 and cost of goods sold of $140,000. During the year, the balance in accounts receivable increased $30,000, the balance in accounts payable decreased $25,000, and the balance in inventory increased $10,000. The company uses the direct method to determine the net cash provided by operating activities on its statement of cash flows. Under the direct method, sales adjusted to a cash basis would be:

• A)$295,000
• B)$345,000
• C)$405,000
• D)$355,000

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