Pastel Paints Company uses the direct method for its statement of cash flow.It reports the following information regarding the year 2014: From the income statement:
Sales Revenues,$265,000
Cost of Goods Sold,$210,000
Operating expenses,$31,000
From the balance sheet:

- On the statement of cash flows,what amount will be shown for payments to suppliers for operating expenses? (Assume that Accounts Payable are for purchases of inventory only and Accrued Liabilities relate to Operating Expenses.)

Question

Pastel Paints Company uses the direct method for its statement of cash flow.It reports the following information regarding the year 2014: From the income statement:
Sales Revenues,$265,000
Cost of Goods Sold,$210,000
Operating expenses,$31,000
From the balance sheet:

- On the statement of cash flows,what amount will be shown for payments to suppliers for operating expenses? (Assume that Accounts Payable are for purchases of inventory only and Accrued Liabilities relate to Operating Expenses.)

Quizplus · Accepted Answer

Payments to suppliers for operating expenses are shown in the operating activities section of the statement of cash flows. In this case, the amount shown will be $33,500, which is the sum of the decrease in Accounts Payable and the increase in Accrued Liabilities.

Pastel Paints Company Uses the Direct Method for Its Statement