Kuma,Inc.had cost of goods sold of $106,000 for the just completed year.Shown below are the beginning and ending balances of various Kuma accounts: Kuma prepares its statement of cash flows using the direct method.On its statement of cash flows,what amount should Kuma show for its cost of goods sold adjusted to a cash basis (i.e. ,cash paid to suppliers)?
$\begin{array}{lcc}
&\text { Ending}&\text { Beginning }\
\text { Cash.................... } & \$ 59,000 & \$ 45,000 \
\text { Accounts receivable....... } & \$ 75,000 & \$ 81,000 \
\text { Inventory ................. } & \$ 36,000 & \$ 42,000 \
\text { Accounts payable ......... } & \$ 18,000 & \$ 14,000 \
\text { Retained earnings........ } & \$ 79,000 & \$ 64,000
\end{array}$

Question

Quizplus · Accepted Answer

Cost of goods sold adjusted to a cash basis is calculated as follows:Cost of goods sold (as reported) $106,000Add: Decrease in inventory (42,000 - 36,000) 6,000Less: Increase in accounts payable (18,000 - 14,000) 4,000Cost of goods sold adjusted to a cash basis $96,000

Kuma,IncHad Cost of Goods Sold of $106,000 for the Just