Table 17 -5
Parmesan Company Uses the Direct Method for Its

Table 17 -5
Parmesan Company uses the direct method for its statement of cash flow. It reports the following information regarding the year 2017:
From the income statement:
$$\begin{array} { l l } \text { Revenues: } & \$ 240,000 \\\text { Cost of goods sold: } & \$ 190,000 \\\text { Operating expenses: } & \$ 25,000\end{array}$$ $\begin{array}{lcc}\text { From the balance sheet: } & \text { Beginning balance } & \text { Ending balance } \\\text { Accounts receivable: } & \$ 12,000 & \$ 15,000 \\\text { Inventory: } & \$ 22,000 & \$ 18,000 \\\text { Accounts payable: } & \$ 7,000 & \$ 12,000 \\\text { Accrued liabilities: } & \$ 3,000 & \$ 1,200\end{array}$ Note: accounts payable relate to inventory purchases; accrued liabilities relate to operating expenses
-Refer to Table 17-5.On the cash flow statement,what amount will be shown for payments to suppliers for operating expenses?

A) $26,800
B) $23,200
C) $30,000
D) $18,600