?Crossword, Inc. uses the direct method to prepare its statement of cash flows.

Question

?Crossword, 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, 2017:

Use the direct method to compute the payments to suppliers for Merchandise Inventory and other operating expenses.? (Accrued Liabilities relate to other operating? expense.)

Comparative Balance Sheet December 31, 2017 and 2016 Increase Cash Accounts Receivable Merchandise Inventory PP&E;, net Total Assets 2017 $36,300 29,100 52,600 126,000 $244,000 2016 $16,300 36,100 25,600 92,000 $170,000 (Decrease) $20,000 (7,000) 27,000 34,000 $74,000

Explanation / Answer

Merchandise Inventory, ending balance ..............................................$52,600
Add: Cost of Goods Sold .....................................................................$145,400
Less: Merchandise Inventory, beginning balance ................................($25,600)
Purchases ............................................................................................$172,400
Add: Accounts Payable, beginning balance ..........................................$13,200
Less: Accounts Payable, ending balance ..............................................($9,200 )
Cash paid for merchandise inventory......................................................$176,400

Accrued Liabilities, beginning balance .....................................................$3,000
Add: Other Operating Expenses...............................................................$23,600
Less: Accrued Liabilities, ending balance ................................................($7,000 )
Cash paid for other operating expenses .....................................................$19,600

Total amount paid to suppliers (176400+19600).............................................$196,000

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