Gladiator, Inc uses the direct method to prepare its statement of cash flows
Use the following information reported for 2016 to compute the amount of cash paid for merchandise inventory.
Cost of Goods Sold, $134,000
Merchandise Inventory, beginning balance, $27,000
Merchandise Inventory, ending balance, $67,000
Accounts Payable, beginning balance, $7,600
Accounts Payable, ending balance, $5,000
A) $176,600
B) $94,000
C) $174,000
D) $171,400
A .A)
Merchandise Inventory, ending balance $67,000
Add: Cost of Goods Sold 134,000
Less: Merchandise Inventory, beginning balance 27,000
Purchases 174,000
Add: Accounts Payable, beginning balance 7,600
Less: Accounts Payable, ending balance 5,000
Cash paid for merchandise inventory $176,600
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