Tatum Company had an increase in inventory of $40,000. The cost of goods sold was $80,000. There was a $5,000 decrease in accounts payable from the prior period. What were Tatum's cash payments to suppliers?
A) $125,000
B) $75,000
C) $115,000
D) $85,000

Question

Quizplus · Accepted Answer

To find cash payments to suppliers, use the formula: Cash Payments = COGS + Increase in Inventory - Decrease in Accounts Payable. Here, it is $80,000 + $40,000 - $5,000 = $115,000.

Tatum Company Had an Increase in Inventory of $40,000