Use the following information about the current year's operations of a company to calculate the cash paid for merchandise. $$\begin{array} { l |l }
\text { Cost \& goods sold } \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots & \$ 735,000 \
\hline \text { Merchandise inventory. January } 1 \ldots \ldots \ldots \ldots \ldots \ldots & 84,700 \
\hline \text { Mer chandise inventory. December } 31 \ldots \ldots \ldots \ldots \ldots & 82,400 \
\hline \text { Accounts payable, January } 1 \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots & 54,500 \
\hline \text { Accounts payable, December } 31 \ldots \ldots \ldots \ldots \ldots \ldots & 60,200
\end{array}$$
A) $727,000.
B) $726,300.
C) $732,700.
D) $737,700.
E) $737,300.

Question

Use the following information about the current year's operations of a company to calculate the cash paid for merchandise. $$\begin{array} { l |l  } 
\text { Cost \& goods sold } \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots & \$ 735,000 \
\hline \text { Merchandise inventory. January } 1 \ldots \ldots \ldots \ldots \ldots \ldots & 84,700 \
\hline \text { Mer chandise inventory. December } 31 \ldots \ldots \ldots \ldots \ldots & 82,400 \
\hline \text { Accounts payable, January } 1 \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots & 54,500 \
\hline \text { Accounts payable, December } 31 \ldots \ldots \ldots \ldots \ldots \ldots & 60,200
\end{array}$$
A) $727,000.
B) $726,300.
C) $732,700.
D) $737,700.
E) $737,300.

Quizplus · Accepted Answer

The cash paid for merchandise is calculated as the cost of goods sold plus the increase in accounts payable minus the decrease in merchandise inventory.Cost of goods sold = $735,000Increase in accounts payable = $60,200 - $54,500 = $5,700Decrease in merchandise inventory = $84,700 - $82,400 = $2,300Cash paid for merchandise = $735,000 + $5,700 - $2,300 = $738,400

Use the Following Information About the Current Year's Operations of a Company