Jankowski Corporation 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 $150,000. The cash payments made to suppliers were
A) $150,000.
B) $160,000.
C) $130,000.
D) $145,000.

Question

Quizplus · Accepted Answer

The cash payments to suppliers can be calculated by adjusting the cost of goods sold for changes in inventory and accounts payable. The formula is: Cash Payments = Cost of Goods Sold + Increase in Inventory - Increase in Accounts Payable. Therefore, $150,000 + $15,000 - $5,000 = $160,000.

Jankowski Corporation Reports a $15,000 Increase in Inventory and a $5,000