Selected balance sheet and income statement data for Fowler Inc. are presented below. The company uses the direct method in preparing its statement of cash flows.

- Refer to Exhibit 13-4. Given the information above, cash paid for inventory is

Question

Selected balance sheet and income statement data for Fowler Inc. are presented below. The company uses the direct method in preparing its statement of cash flows.

- Refer to Exhibit 13-4. Given the information above, cash paid for inventory is

Quizplus · Accepted Answer

Using the direct method, we calculate cash paid for inventory by starting with the cost of goods sold and adjusting for changes in inventory balances.
Cash paid for inventory = Cost of Goods Sold + Beginning Inventory - Ending Inventory
= $220,000 + $100,000 - $92,000
= $228,000 - $92,000
= $62,000

Selected Balance Sheet and Income Statement Data for Fowler Inc