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…

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

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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.

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