The following information was provided by the records of QRS for the current reporting year: $$\begin{array} { | l | l | }
\hline \text { Cost of goods sold (as reported on the income statement } & \$ 80,000 \
\hline \text { Inventory increase } & 20,000 \
\hline \text { Accounts payable increase } & 3,000 \
\hline
\end{array}$$ The cash paid to suppliers was:
A) $63,000.
B) $77,000.
C) $80,000.
D) $97,000.

Question

The following information was provided by the records of QRS for the current reporting year: $$\begin{array} { | l | l | } 
\hline \text { Cost of goods sold (as reported on the income statement } & \$ 80,000 \
\hline \text { Inventory increase } & 20,000 \
\hline \text { Accounts payable increase } & 3,000 \
\hline
\end{array}$$ The cash paid to suppliers was:
A) $63,000.
B) $77,000.
C) $80,000.
D) $97,000.

Quizplus · Accepted Answer

The cash paid to suppliers is calculated by adjusting the cost of goods sold for changes in inventory and accounts payable. The formula is: Cash Paid to Suppliers = Cost of Goods Sold + Increase in Inventory - Increase in Accounts Payable. Plugging in the numbers: $80,000 + $20,000 - $3,000 = $97,000.

The Following Information Was Provided by the Records of QRS