Cost of goods sold during the year was $183,000. During the year, merchandise inventory decreased by $8,000, prepaid expenses increased by $1,000, and accounts payable decreased by $4,000. Based upon this and using the direct method of reporting cash flows from operating activities, cash payments to suppliers total Select one: a. $187,000. b. $179,000. c. $188,000. d. $180,000. e. $186,000.

The correct option is B

Explanation:

In this question, we are asked to calculate the cash payment to suppliers total.

To calculate this, we employ a mathematical approach.

Mathematically;

Cash Payment to supplier

= cost of goods sold - decrease in inventory +decrease in account payable

From the question, we identify;

Cost of goods sold = $183,000

Decrease in inventory =$8,000

Decrease in account payable =$4,000

Plugging these values in the equation, we have;

Cash payment to supplier = 183000 - 8000+4000

= $ 179000

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