Assume that a company provided the following statement of cash flows (all sales are on account): Operating activities: Net income $ 45Adjustments to convert net income to a cash basis: Depreciation$ 15 Decrease in accounts receivable2 Increase in inventory(10) Increase in accounts payable411Net cash provided by (used in) operating activities 56Investing activities: Additions to property, plant, & equipment(40) Net cash provided by (used in) investing activities (40)Financing activities: Issuance of common stock5 Cash dividends paid(14) Net cash provided by (used in) financing activities (9)Net increase in cash and cash equivalents 7Beginning cash and cash equivalents 6Ending cash and cash equivalents $ 13If the company’s cost of goods sold was $138, then its cash paid inventory purchases was:Garrison 17e Rechecks 2020-10-02 Multiple Choice $144. $132. $148. $128.

Cash paid for inventory purchases means the amount of money that has been paid by the entity during a period to its suppliers for inventory. It is a part of direct method of cash flow statements.Cash paid for inventory purchase=Cost of goods sold+Increase in inventory-Increase in accounts payable=$138+$10-$4=$144 Thus, $144 is the correct answer.

Answered: Assume that a company provided the…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Question

Assume that a company provided the following statement of cash flows (all sales are on account):

Operating activities:
Net income		$ 45
Adjustments to convert net income to a cash basis:
Depreciation	$ 15
Decrease in accounts receivable	2
Increase in inventory	(10)
Increase in accounts payable	4	11
Net cash provided by (used in) operating activities		56
Investing activities:
Additions to property, plant, & equipment	(40)
Net cash provided by (used in) investing activities		(40)
Financing activities:
Issuance of common stock	5
Cash dividends paid	(14)
Net cash provided by (used in) financing activities		(9)
Net increase in cash and cash equivalents		7
Beginning cash and cash equivalents		6
Ending cash and cash equivalents		$ 13

If the company’s cost of goods sold was $138, then its cash paid inventory purchases was:

Garrison 17e Rechecks 2020-10-02

Multiple Choice

$144.
$132.
$148.
$128.

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions