Avatar Company Uses the Direct Method to Prepare Its Statement

question 87

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:
$\begin{array}{lr}\text { Cost of goods sold } & \$ 110,000 \\\text { Inventory beginning balance: } & \$ 25,000 \\\text { Inventory ending balance: } & \$ 53,000 \\\text { Accounts payable beginning balance: } & \$ 6,000 \\\text { Accounts payable ending balance: } & \$ 4,000 \\\text { Operating expenses } & \$ 23,000 \\\text { Accrued liabilities, beginning balance: } & \$ 1,000 \\\text { Accrued liabilities, ending balance: } & \$ 2,000\end{array}$ In the operating activities section of the statement of cash flows, what amount will be shown for payments to suppliers?

• A) $136,000
• B) $132,000
• C) $118,000
• D) $162,000

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Definitions:

Acid-Base Pair

Two substances that differ only by the presence or absence of a hydrogen ion and can interconvert by the gain or loss of a proton.

Conjugate Base

The resulting species after a proton has been given up by an acid in a chemical reaction.

Phenol

An aromatic organic compound with the molecular formula C6H5OH, featuring a phenyl group bonded to a hydroxyl group.

Trifluoromethanesulfonic Acid

A strong acid often used in organic chemistry syntheses, recognized for its powerful protonating ability.