Colie Company had an increase in inventory of $120,000.The cost of goods sold was $560,000.There was a $30,000 decrease in accounts payable from the prior period.Using the direct method of reporting cash flows from operating activities, what were Colie's cash payments to suppliers?
A)$710,000.
B)$650,000.
C)$440,000.
D)$380,000.

Question

Quizplus · Accepted Answer

To calculate cash payments to suppliers using the direct method, start with the cost of goods sold ($560,000), add the increase in inventory ($120,000), and subtract the decrease in accounts payable ($30,000). This results in cash payments to suppliers of $710,000.

Colie Company Had an Increase in Inventory of $120,000