The following selected account balances were taken from ABC Company\'s general l
ID: 2538827 • Letter: T
Question
The following selected account balances were taken from ABC Company's general ledgers for 2019: January 1, 2019 December 31, 2019 Inventory 49,000 52,000 Accounts payable 50,000 28,000 Salaries payable 9,000 3,000 Investments 68,000 75,000 Accounts receivable 69,000 53,000 Land 58,000 88,000 Notes payable 120,000 95,000 Common stock 100,000 170,000 Retained earnings 22,000 35,000 The following information was taken from ABC Company's 2019 income statement: Sales revenue $430,000 Cost of goods sold 300,000 Salaries expense 88,000 Net income $ 42,000 Calculate the amount of cash paid to suppliers for purchases of inventory during 2019.
Explanation / Answer
Purchase = Cost of goods sold+ending inventory-beginning inventory
= 300000+52000-49000
Purchase = 303000
Cash paid to suppliers for purchase of inventory = Beginning account payable+purchase-ending account payable
= 50000+303000-28000
Cash paid to suppliers for purchase of inventory = 325000