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Tanglewood,Inc Use the Direct Method to Compute the Payments to Suppliers

question 139

Multiple Choice

Tanglewood,Inc.uses the direct method to prepare its statement of cash flows.Refer to the following financial statement information for the year ended December 31,2018: $Tanglewood,Inc.uses the direct method to prepare its statement of cash flows.Refer to the following financial statement information for the year ended December 31,2018: \begin{array}{c} \text {Tanglewood, Inc.}\\ \text {Income Statement}\\ \text {December 31,2018}\\\begin{array}{|l|r|l|} \hline\text { Sales Revenue } & \$ 289,600 & \\ \hline \text { Interest Revenue } & 2700 & \\ \hline \text { Gain on Sale of Plant Assets } & 6,000 & \\ \hline \text { Total Revenues and Gains } & & \$ 298,300\\ \hline\text { Cost of Goods Sold } & 145,000 \\ \hline \text { Salaries and Wages Expense } & 49,700 \\ \hline \text { Depreciation Expense - Plant Assets } & 16,000 \\ \hline \text { Other Operating Expense } & 24,300 \\ \hline\text { Interest Expense } & 3,500 \\ \hline \text { Income Tax Expense } & 7,800 \\ \hline \text { Total Expenses } &&246,300\\ \hline\text { Net Income }&&\$52,000\\ \hline \end{array}\end{array} Use the direct method to compute the payments to suppliers for Merchandise Inventory and other operating expenses.(Accrued Liabilities relate to other operating expense.) A) $197,000 B) $177,500 C) $19,500 D) $201,000$ $\begin{array}{c}\text {Tanglewood, Inc.}\\\text {Income Statement}\\\text {December 31,2018}\\\begin{array}{|l|r|l|}\hline\text { Sales Revenue } & \$ 289,600 & \\\hline \text { Interest Revenue } & 2700 & \\\hline \text { Gain on Sale of Plant Assets } & 6,000 & \\\hline \text { Total Revenues and Gains } & & \$ 298,300\\\hline\text { Cost of Goods Sold } & 145,000 \\\hline \text { Salaries and Wages Expense } & 49,700 \\\hline \text { Depreciation Expense - Plant Assets } & 16,000 \\\hline \text { Other Operating Expense } & 24,300 \\\hline\text { Interest Expense } & 3,500 \\\hline \text { Income Tax Expense } & 7,800 \\\hline \text { Total Expenses } &&246,300\\\hline\text { Net Income }&&\$52,000\\\hline\end{array}\end{array}$ Use the direct method to compute the payments to suppliers for Merchandise Inventory and other operating expenses.(Accrued Liabilities relate to other operating expense.)

Definitions:

Recession

A short-term downturn in the economy characterized by decreased trade and industrial production, typically marked by a decline in gross domestic product (GDP) for two consecutive quarters.

Employment

Employment refers to the condition of having paid work or the relationship between an employer and an employee who performs work or services for compensation.

Income Decrease

Income Decrease refers to a reduction in the amount of money received by an individual or entity, often affecting purchasing power and economic stability.

Average Price

The mean cost of a good or service, calculated by summing the prices of all the units sold and dividing by the quantity sold.