Cost of merchandise sold reported on the income statement was $155,000. The accounts payable balance increased $8,000, and the inventory balance increased by $21,000 over the year. Determine the amount of cash paid for merchandise.

Question

Cale

Business

1 August, 19:57

Cost of merchandise sold reported on the income statement was $155,000. The accounts payable balance increased $8,000, and the inventory balance increased by $21,000 over the year. Determine the amount of cash paid for merchandise.

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Ashlynn · Answer 1

Cash paid 168,000

Explanation:

Assuming that there were no inventory at start of the year

purchases during the year:

Sold = 155

Closing inventory = 21

Total purchase (155+21) = 176

Cash paid for merchandise = total purchase - increase in liability

Cash paid = 176-8 = 168