Lester Enterprises\' comparative balance sheets included inventory of $90,200 at

Question

Lester Enterprises' comparative balance sheets included inventory of $90,200 at December 31, 2011, and $70,600 at December 31, 2012. Lester's comparative balance sheets also included accounts payable of $57,700 at December 31, 2011, and $39,200 at December 31, 2012. Lester's accounts payable balances are composed solely of amounts due to suppliers for purchases of inventory on account. Cost of goods sold, as reported by Lester on its 2012 income statement, amounted to $770,900.

What is the amount of cash payments for inventory that Lester will report in the Operating Activities section of its 2012 statement of cash flows assuming that the direct method is used?

Explanation / Answer

Inventory December 31, 2011. 90,200 Plus purchase during 2012 Less cost of goods sold during 2012 770 600 90,200 + X-770 900=770 600 X= $751 300 answer =========================================================================================================================================================================================== ACCOUNTS PAYABLE December 31, 2011. 577000 PLUS PURCHASE DURING 2012 751300 LESS CAH PAYMENTS DURING 2011 LESS CASH PAYAMNETS DURING 2012 ACCOUNT PAYABLE DURING December 31, 2012 $39200 57 700+751300-X=39200 X=769800 answer

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