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:

Merger Premium

The additional cost above the market price that a company pays to acquire another company.

Market Price

The present-day value at which you can sell or buy an asset or service.

Shares Outstanding

The total number of shares of a corporation's stock that are owned by shareholders, including restrictions shares and those held by the public.

Synergy Value

The additional value created by combining two companies, expected to be greater than the sum of their parts.