A company reported the following information: $\begin{array}{ll}
\text { Accounts payable, December 31,2013 } &\$ 60,000 \
\text { Accounts payable, December 31, 2014 } &80,000 \
\text { Inventory, December 31, 2013 } &45,000 \
\text { Inventory, December 31, 2014 } &60,000 \
\text { Cost of goods sold-2014 } &1,000,000
\end{array}$ Assuming all merchandise purchases were on account,how much cash was paid to suppliers for merchandise purchases during 2014?
A)$1,005,000
B)$1,050,000
C)$ 995,000
D)$1,020,000

Question

A company reported the following information: $\begin{array}{ll}
 \text { Accounts payable, December 31,2013 } &\$ 60,000 \
 \text {  Accounts payable, December 31, 2014 } &80,000 \
 \text {  Inventory, December 31, 2013 } &45,000 \
 \text {  Inventory, December 31, 2014 } &60,000 \
 \text {  Cost of goods sold-2014 } &1,000,000
\end{array}$ Assuming all merchandise purchases were on account,how much cash was paid to suppliers for merchandise purchases during 2014?
A)$1,005,000
B)$1,050,000
C)$ 995,000
D)$1,020,000

Quizplus · Accepted Answer

To find the cash paid to suppliers, calculate purchases first: Purchases = COGS + Ending Inventory - Beginning Inventory = $1,000,000 + $60,000 - $45,000 = $1,015,000. Then, calculate cash paid: Cash Paid = Beginning Accounts Payable + Purchases - Ending Accounts Payable = $60,000 + $1,015,000 - $80,000 = $995,000.

A Company Reported the Following Information Assuming All Merchandise Purchases Were on Account,how Much Cash Was