Mei Company Uses the Direct Method to Prepare Its Statement

question 68

Multiple Choice

Mei Company uses the direct method to prepare its statement of cash flows. Refer to the following information reported for the year 2014: Cost of Goods Sold, $155,000
Inventory, beginning balance, $26,000
Inventory, ending balance, $63,000
Accounts Payable, beginning balance, $8,100
Accounts Payable, ending balance, $5,100
Operating expenses, $27,000
Accrued Liabilities, beginning balance, $2,500
Accrued Liabilities, ending balance, $6,000
In the operating activities section of the statement of cash flows, what amount will be shown for payments to suppliers? Assume Accrued Liabilities relate to Operating Expenses.

• A)$171,500
• B)$160,000
• C)$195,000
• D)$218,500

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Definitions:

Relational

Pertaining to the establishment and maintenance of meaningful relationships between individuals or groups.

Horizontal Communication

The exchange of information between peers within the same level of an organization, facilitating collaboration and team coordination.

Staff

Refers to all the employees of an organization or a specific group within.

Coworkers

Individuals working together in the same organization, sharing responsibilities or projects.