Stockton-Meadows Incorporated reports an increase in Accounts Payable of $9,200 and an increase in inventory of $45,000 for the current year. Accounts Payable relates solely to the purchase of merchandise. Sales on account were $532,100 and cost of goods sold was $358,000. The payments to suppliers for inventory during the period were:
A)$393,800.
B)$303,800.
C)$412,200.
D)$322,200.

Question

Quizplus · Accepted Answer

The increase in Accounts Payable of $9,200 and the increase in inventory of $45,000 indicate that the company purchased more inventory on account than it sold during the period. The cost of goods sold was $358,000, and the sales on account were $532,100. This means that the company's gross profit was $174,100. The payments to suppliers for inventory during the period must have been $393,800, which is the cost of goods sold plus the increase in inventory.

Stockton-Meadows Incorporated Reports an Increase in Accounts Payable of $9,200