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Pharoah Company reports a $25000 increase in inventory and a $6200 decrease in accounts payable during the year. Cost of Goods Sold for the year was $349700. Using the direct method of reporting cash flows from operating activities, cash payments made to suppliers were

Respuesta :

Answer:

$380,900

Explanation:

We know that

Cost of goods sold = Opening inventory + Purchase - ending inventory

where,

The cost of goods sold is $349,700

Since the inventory is increased the difference between the opening and ending inventory would be $25,000

So, the purchase amount would be

= $349,700 + $25,000

= $374,700

And,

The cash payment to supplier = Beginning Account payable + Purchase  - Ending account payable

Since the account payable  is decreased the difference between the opening and ending inventory would be $6,200

So, the cash payment would be

= $6,200 + $374,700

= $380,900

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