Simmon Incorporation's cost of goods purchased amounted to $20,000. From the beginning until the end of 2011, accounts payable increased by a net amount of $7,000. How much "cash outflows for purchases" should Simmons report for 2011 on their statement of cash flows?

Question

Quizplus · Accepted Answer

The cash outflows for purchases are calculated as cost of goods purchased plus the change in accounts payable. Therefore, the cash outflows for purchases in 2011 should be $20,000 + $7,000 = $27,000. Option B is the closest choice to this answer.

Simmon Incorporation's Cost of Goods Purchased Amounted to $20,000