Question

The following selected account balances appeared on the financial statements of Washington Company: Accounts Receivable, January 1 $16,936 Accounts Receivable, December 31 8,878 Accounts Payable, January 1 5,832 Accounts Payable, December 31 8,151 Merchandise Inventory, January 1 6,202 Merchandise Inventory, December 31 14,530 Sales 61,882 Cost of Merchandise Sold 32,077 Washington Company uses the direct method to calculate net cash flow from operating activities. Cash payments for merchandise were

Answer 1

Answer:

the Cash payment to the merchandise is $38,086

Explanation:

The computation of the cash payment for merchandise is shown below:

Cash payment to the merchandise is

= Cost of goods sold + Increase in inventory - Increase in accounts payable

= $32,077 + ($14,530 - $6,202) - ($8,151 - $5,832)

= $32,077 + $8,328 - $2,319

= $38,086

hence, the Cash payment to the merchandise is $38,086