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Selected Data for Kris Corporation's Comparative Balance Sheets for Year

Question 88

Multiple Choice

Selected data for Kris Corporation's comparative balance sheets for Year 1 and Year 2 are as follows:
 Assets  Year 1  Year 2  Cash $100,000($50,000)  Accounts receivable (net)  50,000100,000 Inventory 100,000250,000 Equipment (net)  $300,000350,000 Total assets $550,000$650,000 Liabilities and Equity  Accounts payable $150,000$100,000 Income taxes payable 80,00030,000 Bonds payable 100,00080,000 Common stock 100,000200,000 Retained earnings 120,000240,000 Total liabilities and Equity $550,000$650,000 A brief income statement for Year 2 shows the  following:  Sales $900,000 Cost of goods sold $500,000 Operating expenses 100,000 Depreciation 50,000 Income tax expense 100,000750,000 Net Income $150,000\begin{array}{lrr}\text { Assets } & \text { Year 1 } & \text { Year 2 }\\\hline \text { Cash } & \$ 100,000 & (\$ 50,000) \\\text { Accounts receivable (net) } & 50,000 & 100,000 \\\text { Inventory } & 100,000 & 250,000 \\\text { Equipment (net) } & \$ 300,000 & \underline{350,000} \\{\text { Total assets }} & \$ 550,000 & \$ 650,000\\\\\text { Liabilities and Equity }\\\text { Accounts payable } & \$ 150,000 & \$ 100,000 \\\text { Income taxes payable } & 80,000 & 30,000 \\\text { Bonds payable } & 100,000 & 80,000 \\\text { Common stock } & 100,000 & 200,000 \\\text { Retained earnings } & 120,000 & 240,000 \\\quad \text { Total liabilities and Equity } & \$ 550,000 & \$ 650,000\\\\\text { A brief income statement for Year } 2 \text { shows the }\\\text { following: }\\\text { Sales }&&\$900,000\\\text { Cost of goods sold } & \$ 500,000 \\\text { Operating expenses } & 100,000 \\\text { Depreciation } & 50,000 \\\text { Income tax expense } & 100,000&750,000 \\\text { Net Income }&&\$150,000\end{array}
-How much cash did Kris pay to suppliers for inventory during Year 2? Assume all purchases are on credit.


A) $150,000
B) $400,000
C) $500,000
D) $700,000

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