Alkine Company's Comparative Balance Sheet Appears Below: Alkine Reported

question 18

Multiple Choice

Alkine Company's comparative balance sheet appears below: Alkine reported the following net income for the year: Dividends were declared and paid during the year. A gain of $8,000 was recorded on the sale of the long-term investments. The company did not purchase any long-term investments or dispose of any property, plant, and equipment during the year. It also did not issue any bonds payable or repurchase any of its own common stock.
-Under the direct method,the cost of goods sold adjusted to a cash basis would be:

• A)$152,000
• B)$160,000
• C)$163,000
• D)$155,000

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Definitions:

Contribution Margin

Contribution margin is the revenue remaining after subtracting variable costs, used to cover fixed costs and generate profit, highlighting the profitability of individual products.

Business Segments

Parts or divisions of a company that operate within distinct markets or industries, often reported separately in financial statements for analysis.

Common Fixed Expenses

Overhead costs that are incurred regardless of the level of production or sales, shared by multiple products or departments.

Common Fixed Expenses

Fixed costs shared across different departments or product lines, such as rent or administrative salaries, not directly tied to any one aspect of business operations.