Neutral Paints Company Uses the Direct Method for Preparing Its

question 17

Multiple Choice

Neutral Paints Company uses the direct method for preparing its statement of cash flow.Neutral reports the following information regarding 2017: From the income statement:
Sales Revenues,$266,000
Cost of Goods Sold,$215,000
Operating Expenses,$37,000
From the balance sheet:
$$\begin{array} { | l | r | r | } \hline & \text { Beginning Balance } & \text { Ending Balance } \\\hline \text { Accounts Receivable } & \$ 14,500 & \$ 18,000 \\\hline \text { Merchandise Inventory } & 23,800 & 17,800 \\\hline \text { Accounts Payable } & 6,200 & 13,700 \\\hline \text { Accrued Liabilities } & 4,400 & 1,500 \\\hline\end{array}$$ What amount will be shown for payments to suppliers for operating expenses? (Accounts Payable are for purchases of merchandise inventory only,and Accrued Liabilities relate to operating expenses. )

• A)$39,900
• B)$37,000
• C)$35,500
• D)$41,400

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Definitions:

Muscular Endurance

The ability of a muscle or muscle group to perform repeated contractions over a period without becoming exhausted.

Agility

The ability to move quickly and easily, often considered as physical dexterity.

Desire

A strong feeling of wanting to have something or wishing for something to happen.

FITT Formula

A principle used in exercise that stands for Frequency, Intensity, Time, and Type.