A Company Reported Net Income of $200,000 During 2016

question 99

Multiple Choice

A company reported net income of $200,000 during 2016. The company reported depreciation expense of $35,000, patent amortization of $10,000 and a $5,000 loss on the sale of equipment. Using the indirect method, how much is the company's net cash flow from operating activities?

• A)$245,000.
• B)$250,000.
• C)$240,000.
• D)$235,000.

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Definitions:

Earning Revenue

The process of generating income from business activities over a period, typically from the sale of goods and services.

Net Income

The profit of a company after all expenses, including taxes and costs, have been deducted from total revenue.

Net Profit

The actual profit after working expenses not included in the calculation of gross profit have been paid.

External Users

Individuals or entities outside a company, such as investors and creditors, who rely on financial information to make decisions.