Arena,Inc.uses the direct method to prepare its statement of cash flows.Use the following information reported for 2019 to compute the amount of cash paid for merchandise inventory. Cost of Goods Sold,$134,000
Merchandise Inventory,beginning balance,$27,000
Merchandise Inventory,ending balance,$67,000
Accounts Payable,beginning balance,$7600
Accounts Payable,ending balance,$5000
A) $176,600
B) $94,000
C) $174,000
D) $171,400

Question

Quizplus · Accepted Answer

The amount of cash paid for merchandise inventory can be computed as follows:Beginning Merchandise Inventory + Purchases - Ending Merchandise Inventory = Cash Paid for Merchandise Inventory$27,000 + $134,000 - $67,000 = $94,000

Arena,IncUses the Direct Method to Prepare Its Statement of Cash