Determining Selected Amounts for Cash Flows from Operating ActivitiesDirect Method

Selected data taken from the accounting records of Ginis Inc. for the current year ended December 31 are as follows:

	Balance, December 31		Balance, January 1
Accrued expenses payable (operating expenses)	$6,740		$7,370
Accounts payable (merchandise creditors)	45,000		49,670
Inventories	84,470		91,820
Prepaid expenses	3,750		4,500

During the current year, the cost of merchandise sold was $500,000, and the operating expenses other than depreciation were $90,000. The direct method is used for presenting the cash flows from operating activities on the statement of cash flows.

a. Determine the amount reported on the statement of cash flows for cash payments for merchandise.

Determining Selected Amounts for Cash Flows from Operating Activities-Direct Method Selected data taken from the accounting records of Ginis Inc. for the current year ended December 31 are as follows: Balance, December 31 Balance, January 1 Accrued expenses payable (operating expenses) Accounts payable (mechandise creditors) Inventories Prepaid expenses During the current year, the cost of merchandise sold was $500,000, and the operating expenses other than depreciation were $90,000. The direct method is used for presenting the cash flows from operating activities on the statement of cash flows. a. Determine the amount reported on the statement of cash flows for cash payments for merchandise. $6,740 45,000 84,470 3,750 $7,370 49,670 91,820 4,500 b. Determine the amount reported on the statement of cash flows for cash payments for operating expenses