Question 1

Plymouth Corporation reported an increase in inventory of $75,000. The cost of goods sold for the year was $180,000. There was also a $7,000 decrease in accounts payable from the beginning of the year to the end of the year. What were Plymouth's cash payments to suppliers?

Accepted Answer

The increase in inventory and the decrease in accounts payable represent an increase in cash payments to suppliers. The cost of goods sold is not relevant to this calculation. Therefore, the cash payments to suppliers are $75,000 + $7,000 = $82,000. Adding this to the cost of goods sold of $180,000 gives $262,000.

Question 2

Plymouth Corporation reported a decrease in inventory of $15,000. The cost of goods sold for the year was $180,000. There was also a $5,000 decrease in accounts payable from the beginning of the year to the end of the year. What were Plymouth's cash payments to suppliers?

Accepted Answer

The answer of Plymouth Corporation reported a decrease in inventory...

Question 3

XYZ Corporation reported a $35,000 increase in inventory and a $7,000 decrease in accounts payable during the year. XYZ's cost of goods sold amounted to $185,000. Under the direct method of reporting cash flows from operating activities, cash payments to suppliers amounted to:

Accepted Answer

To calculate cash payments to suppliers, start with the cost of goods sold ($185,000), add the increase in inventory ($35,000), and subtract the decrease in accounts payable ($7,000). This results in $185,000 + $35,000 + $7,000 = $227,000.

Question 4

Outlaw, Inc. began the year with $279,000 in Accounts Receivable and ended the year with $232,700 in Accounts Receivable. Sales for the year were $3,870,000. The cash collected from customers during the year amounted to:

Accepted Answer

The cash collected from customers is calculated by adding the beginning Accounts Receivable to the sales and then subtracting the ending Accounts Receivable: $279,000 + $3,870,000 - $232,700 = $3,916,300.

Question 5

Salem Corporations income statement showed cost of goods sold of $115,000 and operating expenses of $20,000. The inventory account decreased $7,000, accounts payable increased $5,000, prepaid expenses increased $3,000, and accrued expenses payable decreased $2,000.
Calculate the following using the direct method:
1. Cash payments for operating expenses
2. Cash payments to suppliers

Accepted Answer

The answer of Salem Corporations income statement showed cost of...

Quiz 12: The Statement of Cash Flows

Plymouth Corporation reported an increase in inventory of $75,000. The cost of goods sold for the year was $180,000. There was also a $7,000 decrease in accounts payable from the beginning of the year to the end of the year. What were Plymouth's cash payments to suppliers?

Plymouth Corporation reported a decrease in inventory of $15,000. The cost of goods sold for the year was $180,000. There was also a $5,000 decrease in accounts payable from the beginning of the year to the end of the year. What were Plymouth's cash payments to suppliers?

XYZ Corporation reported a $35,000 increase in inventory and a $7,000 decrease in accounts payable during the year. XYZ's cost of goods sold amounted to $185,000. Under the direct method of reporting cash flows from operating activities, cash payments to suppliers amounted to:

Outlaw, Inc. began the year with $279,000 in Accounts Receivable and ended the year with $232,700 in Accounts Receivable. Sales for the year were $3,870,000. The cash collected from customers during the year amounted to: