Gonzo Company reports a $25,000 increase in inventory and a $12,000 decrease in

Question

Gonzo Company reports a $25,000 increase in inventory and a $12,000 decrease in accounts payable during the year. Cost of Goods Sold for the year was $185,000. Using the direct method of reporting cash flows from operating activities, cash payments made to suppliers were

A)

$185,000.

B)

$197,000.

C)

$222,000.

D)

$148,000.

Gonzo Company reports a $25,000 increase in inventory and a $12,000 decrease in accounts payable during the year. Cost of Goods Sold for the year was $185,000. Using the direct method of reporting cash flows from operating activities, cash payments made to suppliers were

A)

$185,000.

B)

$197,000.

C)

$222,000.

D)

$148,000.

Explanation / Answer

Cash payment made to suppliers = 185000+12000+25000 i.e 222000

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