1. In fiscal year 20x3, Elite, Inc. had cost of good sold of 1,000,000 euro. Inventory increased during the year by 250,000 euro while accounts payable increased by 150,000 euro and trade receivables decreased by 200,000 euro. Using the direct method, what would Elite report as cash payments to suppliers for 20x3?
2. On December 12, 20x2, American Co. collected 20,000 won from a foreign customer in settlement of a USD $5,000 trade receivable. American held the currency in its foreign bank account until the end of the year, at which point the exchange rate was 5.00 won per US dollar. This is American’s first year of operations. How would this transaction and the foreign currency fluctuation be reflected in the statement of cash flows under the direct method?