Assume the following information was available for the current year's operations of the shoe company founded by Blake Mycoskie, TOMS.Use these data to calculate the cash paid for merchandise. $\begin{array}{|l|r|}
\hline \text { Cost of goods sold } & \$ 226,000 \
\hline \text { Merchandise inventory, January 1 } & 54,800 \
\hline \text { Merchandise inventory, December 31 } & 57,400 \
\hline \text { Accounts payable, January 1 } & 54,400 \
\hline \text { Accounts payable, December 31 } & 59,800\
\hline
\end{array}$
A)$218,000
B)$223,200
C)$220,000
D)$228,800
E)$234,000

Question

Quizplus · Accepted Answer

Using the formula for cash paid for merchandise (change in inventory + cost of goods sold - change in accounts payable), we have:
(change in inventory) = ending inventory - beginning inventory = 57,400 - 54,800 = 2,600
(change in accounts payable) = ending accounts payable - beginning accounts payable = 59,800 - 54,400 = 5,400
Therefore, cash paid for merchandise = 2,600 + 226,000 - 5,400 = $223,200. Thus, the correct answer is B.

Assume the Following Information Was Available for the Current Year's