whew1110

Calculate the amount of Purchases first.
Purchases = COGS + Increase in inventory
Purchases = 2,000 + 100 = 2,100
Now calculate how much was actually paid for the inventory in cash versus how much was purchased on credit
Cash paid to suppliers = Purchases  Increase in payables
= 2,100  300 = 1,800
Now take net sales and subtract any expense that affects cash flow from operations (ignore noncash expenses like depreciation and items that affect cash flow from financing)
= Net sales  cash paid to suppliers  other cash expenses for inputs  cash tax payments
= 4,000  1,800  500  200 = $1,500
Someone please verify this?