The following information was provided by the records of RST for the annual reporting period ended December 31,2011: $$\begin{array} { l | l | }
\hline \text { Cost of goods sold (as reported on the income statement) } & \$ 170 \
\hline \text { Depreciation expense } & \$ 10 \
\hline \text { Merchandise inventory increase } & \$ 2 \
\hline \text { Goodwill amortized } & \$ 4 \
\hline \text { Accounts payable decrease } & \$ 18 \
\hline
\end{array}$$ The cash paid to suppliers was:
A)$172
B)$188
C)$190
D)$200

Question

The following information was provided by the records of RST for the annual reporting period ended December 31,2011: $$\begin{array} { l | l | } 
\hline \text { Cost of goods sold (as reported on the income statement) } & \$ 170 \
\hline \text { Depreciation expense } & \$ 10 \
\hline \text { Merchandise inventory increase } & \$ 2 \
\hline \text { Goodwill amortized } & \$ 4 \
\hline \text { Accounts payable decrease } & \$ 18 \
\hline
\end{array}$$ The cash paid to suppliers was:
A)$172
B)$188
C)$190
D)$200

Quizplus · Accepted Answer

The cash paid to suppliers is equal to the cost of goods sold plus the increase in merchandise inventory minus the decrease in accounts payable. Therefore, the cash paid to suppliers is $170 + $2 - $18 = $190.

The Following Information Was Provided by the Records of RST