Lucia Ltd Reported Net Income of $135,000 for the Year Ended

question 60

Multiple Choice

Lucia Ltd. reported net income of $135,000 for the year ended December 31, 2013. January 1 balances in accounts receivable and accounts payable were $29,000 and $26,000, respectively. Year-end balances in these accounts were $30,000 and $24,000, respectively. Assuming that all relevant information has been presented, Lucia's cash flows from operating activities would be:

• A)$132,000.
• B)$134,000.
• C)$136,000.
• D)$138,000.

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Definitions:

Option to Abandon

A business decision making tool that allows a company to cease an investment or project if it turns out to be financially nonviable, minimizing losses.

Direct Labor Costs

The total cost of all the labor that is directly involved in the production of goods or the performance of services.

Variable Cost

Expenses that undergo alteration in response to the volume of production executed.

Office Rent

The cost associated with leasing a space for business operations or administrative work.