The cost of goods sold during the year was $380,000.Inventory increased by $12,000 during the year and accounts payable decreased by $19,000 during the year.Using the direct method of reporting cash flows from operating activities, cash payments for inventory total
A)$399,000.
B)$361,000.
C)$387,000.
D)$411,000.

Question

Quizplus · Accepted Answer

The cash payments for inventory can be calculated by adjusting the cost of goods sold for changes in inventory and accounts payable. The formula is: Cash Payments = Cost of Goods Sold + Increase in Inventory - Decrease in Accounts Payable. Therefore, $380,000 + $12,000 + $19,000 = $411,000.

The Cost of Goods Sold During the Year Was $380,000