Sterling Corporation has beginning and ending accounts payable balances of $400 and $800, respectively. Inventory had beginning and ending balances of $700 and $500, respectively. If cost of goods sold was $2,800, how much cash was spent to obtain inventory:
A)$2,000.
B)$2,400.
C)$2,600.
D)None of these.

Question

Quizplus · Accepted Answer

$500 ending inventory + $2,800 COGS - $700 beginning inventory = $2,600 inventory purchased on account; $400 beginning AP + $2,600 purchases - $800 ending AP = $2,200 cash payments

Sterling Corporation Has Beginning and Ending Accounts Payable Balances of $400