The following information pertains to Brockville Inc.for 2012.If Brockville prepares their cash flow statement using the direct method, what was their cash paid to suppliers for the year when calculating their cash flow from operations? $$\begin{array} { l r }
\text { Inventory January 1 } & \$ 300,000 \
\text { Inventory December 31 } & \$ 335,000 \
\text { Accounts payable January 1 } & \$ 45,000 \
\text { Accounts payable December 31 } & \$ 48,000 \
\text { Cost of goods sold during 2012 } & \$ 2,400,000
\end{array}$$

Question

The following information pertains to Brockville Inc.for 2012.If Brockville prepares their cash flow statement using the direct method, what was their cash paid to suppliers for the year when calculating their cash flow from operations? $$\begin{array} { l r } 
\text { Inventory January 1 } & \$ 300,000 \
\text { Inventory December 31 } & \$ 335,000 \
\text { Accounts payable January 1 } & \$ 45,000 \
\text { Accounts payable December 31 } & \$ 48,000 \
\text { Cost of goods sold during 2012 } & \$ 2,400,000
\end{array}$$

Quizplus · Accepted Answer

To calculate cash paid to suppliers, we start with the cost of goods sold (COGS) and adjust for changes in inventory and accounts payable. The formula is: COGS + Increase in Inventory - Increase in Accounts Payable = Cash Paid to Suppliers. Here, it's $2,400,000 + ($335,000 - $300,000) - ($48,000 - $45,000) = $2,400,000 + $35,000 - $3,000 = $2,432,000.

The Following Information Pertains to Brockville Inc A)$32,000 B)$35,000 C)$2,432,000 D)$2,435,000

The Following Information Pertains to Brockville Inc A)$32,000
B)$35,000
C)$2,432,000
D)$2,435,000