Gladiator Inc

question 132

Multiple Choice

Gladiator Inc.uses the direct method to prepare its statement of cash flows.Refer to the following information reported for the year 2014 and determine the amount of cash paid for merchandise inventory. Cost of Goods Sold,$130,000
Inventory,beginning balance,$25,000
Inventory,ending balance,$65,000
Accounts Payable,beginning balance,$7,500
Accounts Payable,ending balance,$4,900

• A)$172,600
• B)$140,000
• C)$170,000
• D)$167,400

---

Definitions:

Total Equity

The total of all stockholder's equity (both preferred and common stock) plus retained earnings within a company.

Average Collection Period

A financial metric indicating the average number of days it takes for a firm to receive payments owed by its customers.

Net Sales

The total revenue from goods and services sold by a business, minus returns, allowances for damaged or missing goods, and discounts.

Average Receivables

Represents the average amount of money owed to a company from its customers over a specific period, indicating its efficiency in collecting funds.