The following selected account balances appeared on the financial statements of

Question

The following selected account balances appeared on the financial statements of the Franklin Company. Use these balances to answer the question that follows. Accounts Receivable, Jan. 1 $14,197 Accounts Receivable, Dec. 31 7,990 Accounts Payable, Jan. 1 4,130 Accounts Payable, Dec. 31 7,939 Inventory, Jan. 1 9,383 Inventory, Dec. 31 14,964 Sales 67,123 Cost of Goods Sold 31,651 The Franklin Company uses the direct method to calculate net cash flow from operating activities. Assume that all accounts payable are owed to merchandise suppliers. Find the cash payments for merchandise. Select the correct answer.

$31,651

$32,277

$34,049

$33,423

Explanation / Answer

Correct option is 33,423

*Hope the above explanation helps, please comment if further explanation is required. Your rating is appreciated*

Particulars Amount Inventory closing balance        14,964 Add cost of goods sold        31,651 Inventory available for sale        46,615 Less opening balance          9,383 Inventory purchases        37,232 Accounts payable opening balance          4,130 Add inventory purchases        37,232 Less Accounts payable closing balance          7,939 Payment for puchases        33,423

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.