Mei Company Uses the Direct Method to Prepare Its Statement

question 78

Multiple Choice

Mei Company uses the direct method to prepare its statement of cash flows.Refer to the following information reported for 2017:
Cost of Goods Sold,$153,000
Merchandise Inventory,beginning balance,$28,000
Merchandise Inventory,ending balance,$60,000
Accounts Payable,beginning balance,$8,100
Accounts Payable,ending balance,$5,100
Operating expenses,$27,000
Accrued Liabilities,beginning balance,$2,900
Accrued Liabilities,ending balance,$6,000
Use the direct method to compute the cash paid to suppliers.(Accrued Liabilities relate to operating expenses. )

• A)$163,900
• B)$164,100
• C)$188,000
• D)$211,900

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Definitions:

Marginal Revenue Product Schedule

A table or representation showing how the marginal revenue product of a factor of production varies as its quantity employed changes.

Land

In economics, land encompasses all natural resources used to produce goods and services, including not just agricultural land but also minerals, forests, and water.

Firm's Demand

The quantity of a product or service that a firm is willing and able to buy at various prices over a given period of time.

Substitution Effect

The change in consumption patterns due to a change in relative prices, causing consumers to substitute away from more expensive items towards cheaper ones.