Urgent help

Closing balance
$ Opening balance
$
Current assets

Inventory

30,000

25,000

Trade receivables

20,000

26,000

Current liabilities

Trade payables

14,000

11,000

Additional informationDuring the year, depreciation of $50,000 and amortisation of $40,000 was charged to the statement of profit or loss.

Cash receipts from customers, including cash sales, were $800,000. Cash paid to suppliers and employees was $626,000.

Interest paid was $12,000 and taxation paid was $13,000.

Required:
(a) Prepare the operating activities section of the statement of cash flows using the direct method.
(b) Prepare the operating activities section of the statement of cash flows using the indirect method.

Solution (a) direct method
The direct method is relatively straightforward in that all the data are cash flows so it is a case of listing the receipts as positive and the payments as negative.

Cash flows from operating activities – Direct method

$

Cash receipts from customers

800,000

*Cash paid to suppliers and employees

(400,000)*

Cash generated from operations

174,000

Interest paid

(12,000)

Taxation paid

(13,000)

Net cash from operating activities 149,000

I am not able to under from where there are puting 400000 in cash paid to suppliers and employees?
Please explain this it is an example of f3 article.