Ardea Limited draws up its statement of cash flows using the direct method. The company presents the following balances in its financial statements for the years ended 31 May 2019 and 31 May 2018:
$\begin{array}{lcc}
& 2019 & 2018 \
& £ & £ \
\text { Cost of sales } & 765,239 & 721,488 \
\text { Inventory at 31 May } & 79,368 & 82,415 \
\text { Trade payables at 31 May } & 99,221 & 101,911
\end{array}$ Based on these figures, how much cash was paid to suppliers (trade payables) during the financial year ended 31 May 2019?
A) £764,882
B) £765,596
C) £767,929
D) £770,976

Question

Ardea Limited draws up its statement of cash flows using the direct method. The company presents the following balances in its financial statements for the years ended 31 May 2019 and 31 May 2018:
$\begin{array}{lcc} 
& 2019 & 2018 \
& £ & £ \
\text { Cost of sales } & 765,239 & 721,488 \
\text { Inventory at 31 May } & 79,368 & 82,415 \
\text { Trade payables at 31 May } & 99,221 & 101,911
\end{array}$ Based on these figures, how much cash was paid to suppliers (trade payables) during the financial year ended 31 May 2019?
A) £764,882
B) £765,596
C) £767,929
D) £770,976

Quizplus · Accepted Answer

The cash paid to suppliers during the financial year ended 31 May 2019 can be calculated as follows:Opening trade payables (2018) £101,911Less: Closing trade payables (2019) (99,221)Cash paid to suppliers £764,882

Ardea Limited Draws Up Its Statement of Cash Flows Using