Use the following information about the current year's operations of a company to calculate the cash paid for merchandise.
A) $585,000.
B) $520,000.
C) $480,000.
D) $508,000.
E) $512,000.

Question

Use the following information about the current year's operations of a company to calculate the cash paid for merchandise. 
A) $585,000. 
B) $520,000. 
C) $480,000. 
D) $508,000. 
E) $512,000.

Quizplus · Accepted Answer

Increase in inventory = $97,000 − $85,000 = $12,000
Purchases = $500,000 +$12,000 = $512,000
Decrease in Accounts payable = $68,000 − $60,000 = $8,000
Cash paid for Merchandise = $512,000 + $8,000 = $520,000
Reconstructed entry:
 11eaadfd_cc34_b98e_95d8_a3217985a726_TB6948_00

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