Firm C accounts payable for the month are $100,000 and its wages and salaries for the month are $100,000.What is its total outgoing cash flow for the month if its interest payments for the month are $50,000,its accounts receivable payments for the month are $100,000,and there are no other cash outflows for the month?
A)$250,000
B)$200,000
C)$350,000
D)Cannot tell because we do not know the beginning cash for the month.

Question

Quizplus · Accepted Answer

Accounts payable, wages and salaries, and interest payments are all cash outflows. Accounts receivable payments are not cash outflows because they represent money coming into the firm. Therefore, the total outgoing cash flow for the month is $100,000 + $100,000 + $50,000 = $250,000.

Firm C Accounts Payable for the Month Are $100,000 and Its