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:

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