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Avatar Company Uses the Direct Method to Prepare Its Statement

Question 123

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Avatar Company uses the direct method to prepare its statement of cash flows. Please refer to the following information reported for the year 2014:
 Cost of goods sold $110,000 Inventory beginning balance: $25,000 Inventory ending balance: $53,000 Accounts payable beginning balance: $6,000 Accounts payable ending balance: $4,000 Operating expenses $23,000 Accrued liabilities, beginning balance: $1,000 Accrued liabilities, ending balance: $2,000\begin{array}{lr}\text { Cost of goods sold } & \$ 110,000 \\\text { Inventory beginning balance: } & \$ 25,000 \\\text { Inventory ending balance: } & \$ 53,000 \\\text { Accounts payable beginning balance: } & \$ 6,000 \\\text { Accounts payable ending balance: } & \$ 4,000 \\\text { Operating expenses } & \$ 23,000 \\\text { Accrued liabilities, beginning balance: } & \$ 1,000 \\\text { Accrued liabilities, ending balance: } & \$ 2,000\end{array} In the operating activities section of the statement of cash flows, what amount will be shown for payments to suppliers?


A) $136,000
B) $132,000
C) $118,000
D) $162,000

Correct Answer:

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