Question

If a company's cost of goods sold is $160,200 for the period, beginning and ending inventory balances are $19,100 and $14,100, respectively, and the beginning and ending accounts payable balances are $24,500 and $8,600, respectively, what is the amount of the cash paid to suppliers?

multiple choice
a. $154,800
b. $165,700
c. $171,100
d. $149,300

Answer 1

The amount of cash paid to suppliers is calculated by adjusting the cost of goods sold by changes in inventory and accounts payable. In this case, the calculation yields a cash payment to suppliers of $181,100.

Step-by-step explanation:

To determine the amount of cash paid to suppliers, we need to adjust the cost of goods sold (COGS) by changes in inventory and accounts payable during the period. The formula to find out the cash paid to suppliers is:

COGS + Beginning Inventory - Ending Inventory + Beginning Accounts Payable - Ending Accounts Payable = Cash Paid to Suppliers

Using the student's provided data:
COGS = $160,200

Beginning Inventory = $19,100

Ending Inventory = $14,100

Beginning Accounts Payable = $24,500

Ending Accounts Payable = $8,600

Plugging these numbers into the formula gives:

$160,200 + $19,100 - $14,100 + $24,500 - $8,600 = $181,100

Therefore, the amount of cash paid to suppliers is $181,100.