Question 47:

ABC Company reports the following information on its 2017 end-of-year financial statements. Assume any increases/decreases to the Balance Sheet accounts were a result of cash transactions.

Using the direct method, determine how much ABC Company paid in cash for inventory?

ABC Company
Balance Sheets
On December 31, 20XX
Assets		2017		2016
Cash and Cash Equivalents		$84,000		$48,700
Accounts Receivable		53,600		50,000
Inventory		39,600		39,000
Prepaid Expenses		5,500		15,000
Equipment		206,000		200,000
Accumulated Depreciation		-126,700		-117,700
Total assets		$262,000		$235,000
		2017		2016
Liabilities and Stockholders' Equity
Accounts Payable		$48,000		$49,000
Accrued Liabilities		44,000		42,000
Common Stock		10,000		9,000
Retained Earnings		160,000		135,000
Total Liabilities and Stockholders'
Equity		$262,000		$235,000

			ABC Company
			Income Statement
		For the Period Ended December 31, 2017
	Sales Revenue				$636,000
	Cost of Goods Sold				240,000
	Gross Profit				$396,000
	Office Expenses				242,000
	Depreciation Expense				9,000
	Income from Operations				145,000
	Interest Expense				0
	Income before Income Taxes				145,000
	Income Tax Expense				120,000
	Net Income				25,000

	$241,600
	$240,400

	$239,600
	$238,000

None of these answers are correct.