Question

The cost of goods sold during the year was $380,000. Inventory increased by $12,000 during the year and accounts payable decreased by $19,000 during the year. Using the direct method of reporting cash flows from operating activities, cash payments for inventory total___________.

Answer 1

$411,000

Step-by-step explanation:

Cost of goods sold was $380,000

Inventory was increased by $12,000

Accounts Payable was decreased by $19,000

The relationship via direct method of cash flow can be established as:

COGS + Increase in Inventory + Decrease in A/P

$380,000 + $12,000 + $19,000 = $411,000