On the statement of cash flows, the cost of goods sold adjusted to a cash basis would be:

A) $360,000
B) $350,000
C) $370,000
D) $381,000

Question

On the statement of cash flows, the cost of goods sold adjusted to a cash basis would be:A) $360,000B) $350,000C) $370,000D) $381,000

Keleque Smith · Accepted Answer

Final Answer : C, Explanation :  The cost of goods sold on an accrual basis is $370,000. However, to adjust it to a cash basis, you need to subtract any increase in inventory from the cost of goods sold and add any decrease in inventory. Since inventory increased by $1,000, the cash basis cost of goods sold is $370,000 - $1,000 = $369,000.

On the statement of cash flows, the cost of goods sold adjusted to a cash basis would be:

A) $360,000
B) $350,000
C) $370,000
D) $381,000

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