Parmesan Company uses the direct method for its statement of cash flow. It reports the following information regarding the year 2014: From the income statement:
Sales Revenues, $265,000
Cost of Goods Sold, $210,000
Operating expenses, $31,000
From the balance sheet: On the statement of cash flows, what amount will be shown for payments to suppliers for inventory purchases? (Assume that Accounts Payable are for purchases of inventory only.)
A)$204,300
B)$211,800
C)$196,800
D)$208,200

Question

Parmesan Company uses the direct method for its statement of cash flow. It reports the following information regarding the year 2014: From the income statement:
Sales Revenues, $265,000
Cost of Goods Sold, $210,000
Operating expenses, $31,000
From the balance sheet:  On the statement of cash flows, what amount will be shown for payments to suppliers for inventory purchases? (Assume that Accounts Payable are for purchases of inventory only.)
A)$204,300 
B)$211,800 
C)$196,800 
D)$208,200

Quizplus · Accepted Answer

The Answer of Parmesan Company uses the direct method for its statement of cash flow. It reports the following information regarding the year 2014: From the income statement:
Sales Revenues, $265,000
Cost of Goods Sold, $210,000
Operating expenses, $31,000
From the balance sheet:  On the statement of cash flows, what amount will be shown for payments to suppliers for inventory purchases? (Assume that Accounts Payable are for purchases of inventory only.)
A)$204,300 
B)$211,800 
C)$196,800 
D)$208,200

Parmesan Company Uses the Direct Method for Its Statement of Cash