Gonzo Company reports a $25000 increase in inventory and a $12000 decrease in accounts payable during the year. Cost of Goods Sold for the year was $185000. Using the direct method of reporting cash flows from operating activities cash payments made to suppliers were
A) $185000.
B) $197000.
C) $222000.
D) $148000.

Question

Quizplus · Accepted Answer

Cash payments made to suppliers = Cost of Goods Sold + Increase in Inventory - Decrease in Accounts Payable = $185,000 + $25,000 - $12,000 = $198,000.

Gonzo Company Reports a $25000 Increase in Inventory and a $12000