For the year 2018, a company sold 400 units for $100 per unit. The cost of goods sold is $62.50 per unit and the shipping charges paid are $3 per unit. The additional information is summarized as follows: Description Beginning inventory Ending inventory |Operating expenses: |Advertising expense Bank Fees Telephone expenses Utilities |Office Supplies expense Sale of equipments Repayment of note payable Amount $9,375 $6,250 $2,500 $100 $1,000 $500 $500 $3,000 $5,000 The income taxes paid for the year are $2,500. Compute the cash flows from the operating activities using the direct method. a. The cash flows from the operating activities is $12,325. b. The cash flows from the operating activities is $11,025. c. The cash flows from the operating activities is $9,825. d. The cash flows from the operating activities is $12,825.

For the year 2018, a company sold 400 units for $100 per unit. The cost of goods sold is $62.50 per unit and the shipping charges paid are $3 per unit. The additional information is summarized as follows: Description Beginning inventory Ending inventory |Operating expenses: |Advertising expense Bank Fees Telephone expenses Utilities |Office Supplies expense Sale of equipments Repayment of note payable Amount $9,375 $6,250 $2,500 $100 $1,000 $500 $500 $3,000 $5,000 The income taxes paid for the year are $2,500. Compute the cash flows from the operating activities using the direct method. a. The cash flows from the operating activities is $12,325. b. The cash flows from the operating activities is $11,025. c. The cash flows from the operating activities is $9,825. d. The cash flows from the operating activities is $12,825.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

100%

For the year 2018, a company sold 400 units for $100 per unit. The cost of goods sold is
$62.50 per unit and the shipping charges paid are $3 per unit. The additional information
is summarized as follows:
Description
|Beginning inventory
Ending inventory
Operating expenses:
|Advertising expense
Bank Fees
Telephone expenses
Amount
$9,375
$6,250
$2,500
$100
$1,000
Utilities
$500
|Office Supplies expense
Sale of equipments
Repayment of note payable
$500
$3,000
$5,000
The income taxes paid for the year are $2,500. Compute the cash flows from the operating
activities using the direct method.
a. The cash flows from the operating activities is $12,325.
b. The cash flows from the operating activities is $11,025.
c. The cash flows from the operating activities is $9,825.
d. The cash flows from the operating activities is $12,825.

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