Avatar Company uses the direct method to prepare its statement of cash flows. Please refer to the following financial statement information for the year 2014:
- On Avatar's statement of cash flows, using the direct method, what amount will be shown for payments to suppliers for Inventory and Other operating expenses?
A) $162,000
B) $142,000
C) $244,000
D) $136,000

Question

Avatar Company uses the direct method to prepare its statement of cash flows. Please refer to the following financial statement information for the year 2014:  
- On Avatar's statement of cash flows, using the direct method, what amount will be shown for payments to suppliers for Inventory and Other operating expenses?
A) $162,000 
B) $142,000 
C) $244,000 
D) $136,000

Quizplus · Accepted Answer

A) Calculations: $110,000 + ($53,000 - $25,000) + ($6,000 - $4,000) = $140,000
$23,000 - ($2,000 - $1,000) = $22,000
$140,000 + $22,000 = $162,000

Avatar Company Uses the Direct Method to Prepare Its Statement