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16 January, 17:15

Dooling Corporation reported balances in the following accounts for the current year:

Beginning Ending

Inventories $600 $300

Accounts payable 300 500

Cost of goods sold was $7,500. What was the amount of cash paid to suppliers?

A. $7,000.

B. $7,200.

C. $7,300.

D. $7,500.

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Answers (1)
  1. 16 January, 17:26
    0
    Option (A) is correct.

    Explanation:

    cost of goods purchased:

    = Cost of goods sold + ending inventory - opening inventory

    = $7,500 + $300 - $600

    = $7,200

    Amount paid to suppliers:

    = cost of goods purchased - Increase in accounts payable

    = $7,200 - (500 - 300)

    = $7,200 - 200

    = $7,000

    Therefore, the amount of cash paid to suppliers is $7,000.
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