Question

Electronic Superstore's inventory increases during the year by $3.8 million, and its accounts payable to suppliers increases by $5.8 million during the same period. What is the amount of cash paid to suppliers of merchandise during the reporting period if its cost of goods sold is $33.0 million? (Round your answers to 1 decimal place. Enter your answers in millions (i.e., $10,100,000 should be entered as 10.1).)

Answer 1

$31 million

Step-by-step explanation:

The computation of the amount of cash paid to suppliers of merchandise during the reporting period is shown below:

= Costs of goods sold + increase in inventory - increase in accounts payable

= $33 million + $3.8 million - $5.8 million

= $31 million

The Costs of goods sold + increase in inventory is also known as purchase of inventory