question archive If a company's Cost of Goods Sold is $159,000 for the period, beginning and ending Inventory balances are $18,500 and $13,500, respectively, and the beginning and ending Accounts Payable balances are $21,500 and $8,000, respectively, what is the amount of the cash paid to suppliers?  

If a company's Cost of Goods Sold is $159,000 for the period, beginning and ending Inventory balances are $18,500 and $13,500, respectively, and the beginning and ending Accounts Payable balances are $21,500 and $8,000, respectively, what is the amount of the cash paid to suppliers?  

Subject:AccountingPrice:2.86 Bought7

If a company's Cost of Goods Sold is $159,000 for the period, beginning and ending Inventory balances are $18,500 and $13,500, respectively, and the beginning and ending Accounts Payable balances are $21,500 and $8,000, respectively, what is the amount of the cash paid to suppliers?

 

pur-new-sol

Purchase A New Answer

Custom new solution created by our subject matter experts

GET A QUOTE

Answer Preview

$167,500

Step-by-step explanation

In a bid to ascertain the amount of cash paid to suppliers of inventory in the period under review, the below formula for cash paid to suppliers is readily useful:

cash paid to suppliers=-cost of goods sold+ decrease in inventory/(-increase in inventory)+increase in accounts payable/(-decrease in accounts payable)

cost of goods sold=$159,000

decrease in inventory=$18,500-$13,500=$5,000

decrease in accounts payable= $21,500-$8,000=$13,500

cash paid to suppliers=-$159,000+$5,000-$13,500

cash paid to suppliers=-$167,500(the negative sign shows that it is a cash outflow)