Wellington Company Uses the Direct Method to Prepare Its Statement

question 114

Multiple Choice

Wellington Company uses the direct method to prepare its statement of cash flows. Refer to the following financial statement information for the year ended December 31, 2015: On Wellington's statement of cash flows, using the direct method, what amount will be shown for payments to suppliers for Inventory and other Operating Expenses? Assume Accrued Liabilities relate to Other Operating Expense.

• A)$197,000
• B)$176,000
• C)$21,000
• D)$200,000

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Definitions:

Outstanding Debts

Financial obligations or amounts owed by a person or entity that are yet to be paid.

Creditors

Individuals, companies, or institutions to whom money is owed by debtors for goods or services that have been provided but not yet paid for.

Purchase of Assets

involves acquiring assets of a company rather than its stock, usually in the context of mergers and acquisitions, focusing on buying specific assets like equipment, inventories, and property.

TradeMarks

Symbols, words, or phrases legally registered or established by use as representing a company or product.