The Change in Each of Kendall Corporation's Balance Sheet Accounts

question 5

Multiple Choice

The change in each of Kendall Corporation's balance sheet accounts last year follows: Kendall Corporation's income statement for the year was: There were no sales or retirements of property,plant,and equipment and no dividends paid during the year.The company pays no income taxes and it did not purchase any long-term investments,issue any bonds payable,or repurchase any of its own common stock.The net cash provided by operating activities on the statement of cash flows is determined using the direct method. The selling and administrative expense adjusted to a cash basis would be:

• A)$120,000
• B)$106,000
• C)$110,000
• D)$112,000

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Definitions:

Financing

Financing is the process of providing funds for business activities, making purchases, or investing.

Commitment Fees

Fees charged by lenders to a borrower for an unused or untapped credit line, ensuring the lender retains availability of the funds.

Risk-Free Rate

The theoretical rate of return of an investment with zero risk, often represented by government bonds.

Compensating Balances

Minimum balance requirements imposed by financial institutions on certain accounts, which borrowers must maintain to compensate for the lower interest rate or fees on loans.