Tatum Company had an increase in inventory of $40,000. The cost of goods sold was $90,000. There was a $5,000 decrease in accounts payable from the prior period. What were Tatum's cash payments to suppliers?
A) $135,000
B) $85,000
C) $125,000
D) $95,000

Question

Quizplus · Accepted Answer

The increase in inventory and the decrease in accounts payable represent an increase in cash payments to suppliers. The cost of goods sold is not relevant to this calculation. Therefore, the cash payments to suppliers are $40,000 + $5,000 = $45,000.

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