Designer Paints Company Uses the Direct Method for Preparing Its

question 18

Multiple Choice

Designer Paints Company uses the direct method for preparing its statement of cash flow.Designer Paints reports the following information regarding 2018:
From the income statement:
Sales Revenues,$268,000
Cost of Goods Sold,$210,000
Operating Expenses,$33,000
From the balance sheet:

What amount will be shown for payments to suppliers for Merchandise Inventory purchases? (Assume that Accounts Payable are for purchases of merchandise inventory only. )

• A)$204,400
• B)$211,400
• C)$197,400
• D)$208,600

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Definitions:

Time Value of Money

The understanding that money present right now has a higher worth compared to the same sum obtained at a later date, as it has the ability to accrue more earnings.

Market Risk

The risk of losses in investments caused by factors that affect the overall performance of the financial markets.

Characteristic Line

A line used in finance to illustrate the rate of return of an asset as a function of the return of the market as a whole.

Systematic Risk

The risk inherent to the entire market or market segment, not diversifiable through portfolio diversification.