Statler Corporation has beginning and ending accounts payable balances of $500 and $950, respectively. Inventory had beginning and ending balances of $800 and $650, respectively. If cost of goods sold was $3,800, how much cash was spent to purchase inventory?
A)$2,850
B)$3,300
C)$3,650
D)$3,200

Question

Quizplus · Accepted Answer

To find the cash spent on inventory, calculate the purchases first: Ending Inventory ($650) + COGS ($3,800) - Beginning Inventory ($800) = Purchases ($3,650). Then, adjust for accounts payable: Beginning Accounts Payable ($500) + Purchases ($3,650) - Ending Accounts Payable ($950) = Cash Spent ($3,200).

Statler Corporation Has Beginning and Ending Accounts Payable Balances of $500