Question

If a company's Cost of goods sold is $159,400 for the period, beginning and ending Inventory balances are $18,700 and $13,700, respectively, and the beginning and ending Accounts Payable balances are $22,500 and $8,200, respectively, what is the amount of the cash paid to suppliers?

a. $155,600
b. $164,900
c. $168,700
d. $150,100

Answer 1

To calculate the cash paid to suppliers, you need to find the change in accounts payable. The change in accounts payable is the difference between the beginning and ending accounts payable balances. In this case, the change is ($8,200 - $22,500) = -$14,300.

Step-by-step explanation:

To calculate the cash paid to suppliers, you need to find the change in accounts payable. The change in accounts payable is the difference between the beginning and ending accounts payable balances. In this case, the change is ($8,200 - $22,500) = -$14,300.

Since accounts payable is a liability, a decrease in accounts payable represents a cash outflow to suppliers. So, the amount of cash paid to suppliers is $14,300.