The following selected account balances appeared on the financial statements of the Washington Company: The Washington Company uses the direct method to calculate net cash flow from operating activities.
Cash paid to suppliers is
A) $39,000
B) $33,000
C) $29,000
D) $23,000

Question

The following selected account balances appeared on the financial statements of the Washington Company:  The Washington Company uses the direct method to calculate net cash flow from operating activities.
Cash paid to suppliers is
A) $39,000 
B) $33,000 
C) $29,000 
D) $23,000

Quizplus · Accepted Answer

According to the information given on the financial statements, the following formula can be used to calculate cash paid to suppliers:
Cash paid to suppliers = Cost of goods sold + decrease in accounts payable
= $42,000 + ($3,000 - $12,000) = $33,000
Therefore, the correct choice is B.

The Following Selected Account Balances Appeared on the Financial Statements