Lars Limited Draws Up Its Statement of Cash Flows Using

question 26

Multiple Choice

Lars Limited draws up its statement of cash flows using the direct method. The company presents you with the following figures:
$\begin{array}{lr}& £ \\\text { Purchases for the year to } 31 \text { May } 2019 & 375,000 \\\text { Trade payables at } 31 \text { May } 2019 & 42,650 \\\text { Discounts received for the year to } 31 \text { May } 2019 & 6,250 \\\text { Trade payables at } 31 \text { May } 2018 & 44,815 \\\text { Purchase returns for the year to } 31 \text { May 2019 } & 22,500\end{array}$ What was the cash paid to suppliers during the financial year to 31 May 2019?

• A) £344,085
• B) £348,415
• C) £356,585
• D) £360,915

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Definitions:

Unique-Event

A one-of-a-kind occurrence or happening that is distinct from other events in its specificity or significance.

Marginal Cost

This is the additional cost of producing one more unit of a good or service.

Multiple Suppliers

A sourcing strategy where a company uses various suppliers to mitigate risks and ensure a steady supply of products or components.

Bullwhip Effect

The increasing fluctuation in orders that often occurs as orders move through the supply chain.