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21 November, 14:44

During the current year, Harold Company sold inventory costing $350,000 for a selling price of $675,000. Beginning balances of inventory and accounts payable were $86,000 and $116,000, respectively. The ending balance of inventory is $94,000 and the ending balance of accounts payable is $123,000. What is the amount of cash paid to the suppliers of goods?

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  1. 21 November, 16:11
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    Answer: $351,000

    Explanation:

    Given that,

    Cost of inventory = $350,000

    Selling price = $675,000

    Beginning balance of inventory = $86,000

    Beginning balance of accounts payable = $116,000

    ending balance of inventory = $94,000

    ending balance of accounts payable = $123,000

    Cash paid to suppliers:

    = Cost of Goods Sold + Change in inventory - Change in accounts payable

    = 350,000 + (94,000-86,000) - (123,000-116,000)

    = 350,000 + 8,000 - 7,000

    = $351,000
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