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Question
Selected data for the current year ended December 31 are as follows:
| Balance | Balance | |
| December 31 | January 1 | |
| Accrued expenses (operating expenses) | $29,500 | $ 22,000 |
| Accounts payable (merchandise creditors) | 90,000 | 135,000 |
| Inventories | 42,500 | 68,000 |
| Prepaid expenses | 23,000 | 20,000 |
During the current year, the cost of merchandise sold was $620,000 and the operating expenses other than depreciation were $142,000. The direct method is used for presenting the cash flows from operating activities on the statement of cash flows.
Determine the amount reported on the statement of cash flows for (a) cash paid for merchandise and (b) cash paid for operating expenses.
Answer
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