Question

Consider the following:

Beginning Merch Inventory: $34,000
Ending Merch Inventory: $44,000
Beginning Accts Payable: $36,000
Ending Accts Payable: $43,000
The cost of goods sold (COGS) was $490,000. What was the amount of cash paid for in merchandise?

Answer 1

The amount of cash paid for merchandise is $483,000. The amount of cash paid for merchandise, you need to consider the change in accounts payable. The formula to calculate the cash paid for merchandise is: Cash Paid for Merchandise = COGS + Beginning Accounts Payable - Ending Accounts Payable.

Step-by-step explanation:

To calculate the amount of cash paid for merchandise, you need to consider the change in accounts payable. The formula to calculate the cash paid for merchandise is: Cash Paid for Merchandise = COGS + Beginning Accounts Payable - Ending Accounts Payable.

Using the given information, the cash paid for merchandise can be calculated as follows:

• COGS = $490,000
• Beginning Accounts Payable = $36,000
• Ending Accounts Payable = $43,000

Plugging in these values into the formula, we can calculate:

Cash Paid for Merchandise = $490,000 + $36,000 - $43,000 = $483,000

Therefore, the amount of cash paid for merchandise is $483,000.