Gary Company reports a $15,000 increase in inventory and a $5,000 increase in accounts payable during the year. Cost of Goods Sold for the year was $180,000. The cash payments made to suppliers were
A) $180,000.
B) $190,000.
C) $160,000.
D) $175,000.

Question

Quizplus · Accepted Answer

The cash payments to suppliers can be calculated by adjusting the Cost of Goods Sold (COGS) for changes in inventory and accounts payable. The formula is: Cash Payments = COGS + Increase in Inventory - Increase in Accounts Payable. Therefore, $180,000 + $15,000 - $5,000 = $190,000.

Gary Company Reports a $15,000 Increase in Inventory and a $5,000