Avatar Company Uses the Direct Method to Prepare Its Statement

question 117

Multiple Choice

Avatar Company uses the direct method to prepare its statement of cash flows. Please refer to the following information reported for the year 2014:
$\begin{array}{lr}\text { Cost of goods sold } & \$ 110,000 \\\text { Inventory beginning balance: } & \$ 25,000 \\\text { Inventory ending balance: } & \$ 53,000 \\\text { Accounts payable beginning balance: } & \$ 6,000 \\\text { Accounts payable ending balance: } & \$ 4,000\end{array}$
What amount was paid to suppliers for inventory purchases on a cash basis?

• A) $140,000
• B) $136,000
• C) $80,000
• D) $82,000

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Definitions:

Global Industry

Economic activities that occur on an international scale, transcending national borders and involving the production, distribution, and marketing of goods and services worldwide.

Tourism

The activity of traveling to places for pleasure and exploration.

Transnationals

Corporations or enterprises that operate in multiple countries, transcending national borders in their activities, production, and management.

Economic Refugees

Individuals or groups who are forced to leave their home country due to severe economic hardship, in search of a better standard of living elsewhere.