Jewel Tone Paints Company uses the direct method for preparing its statement of
ID: 2492259 • Letter: J
Question
Jewel Tone Paints Company uses the direct method for preparing its statement of cash flow. Jewel Tone reports the following information regarding 2017:
From the income statement:
Sales Revenues, $267,000
Cost of Goods Sold, $213,000
Operating Expenses, $33,000
From the balance sheet:
Beginning Balance
Ending Balance
Accounts Receivable
$14,500
$17,900
Merchandise Inventory
24,100
18,400
Accounts Payable
6,900
13,500
Accrued Liabilities
4,800
1,600
What amount will be shown for payments to suppliers for Merchandise Inventory purchases? (Assume that Accounts Payable are for purchases of merchandise inventory only.)
A. $207,300
B. $200,700
C. $212,100
D. $213,900
Beginning Balance
Ending Balance
Accounts Receivable
$14,500
$17,900
Merchandise Inventory
24,100
18,400
Accounts Payable
6,900
13,500
Accrued Liabilities
4,800
1,600
Explanation / Answer
Details Amt $ Cash payments to Suppliers for merchandise inventory purchase =cost of goods sold- decrease in Inventory - increase in Accounts Payable =213000-(24100-18400)-(13500-6900) 200,700 So Correct Answer is B. $200,700
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