Question

In its​ year-end income​ statement, Black Knights Company reported cost of goods sold of​ $450,000. Changes occurred in several balance sheet accounts during the year as​ follows: Inventory ​$160,000 decrease Accounts​ payable-suppliers ​40,000 decrease What amount should the Black Knights Company report as cash paid to suppliers in its cash flow​ statement, prepared under the direct​ method?

Answer 1

Answer:

The answer is $330,000

Explanation:

Cash paid to suppliers is the total amount of cash paid to its creditors.

We can find that through:

Cost of sold

Minus: Decrease in inventory

Plus: Decrease in accounts payable

=Cash paid to suppliers.

Now let's start:

Cost of sold - $450,000

Decrease in inventory - $160,000

Decrease in accounts payable- $40,000

$450,000 - $160,000 + $40,000

=$330,000

Therefore, Cash paid to suppliers is $330,000