Question

The cost of merchandise sold during the year was $54,000. Merchandise inventories increased by $2,000. Accounts payable increased by $3,000. Using the direct method of reporting cash flows from operating activities, cash payments for merchandise are calculateda. $47,000
b. $51,000
c. $53,000
d. $49,000

Answer 1

Answer:

C=$53000

Explanation:

using the direct method of cash flow

 Cash flow from operating Activities                                                        

opening stock Assumed     =                   Nil

Cost of goods sold           =                  54000

Add: Stock increased by =                   2000

Total Purchases (54+2)   =                   56000

Closing Paybles Increase by =            (3000)

Cash Payments =  opening + Purchases-closing payables

Cash Payments = Nil+56000-3000 = 56000

Answer 2

Answer:

c

Explanation: