Question

Pepper Company reports a $120,000 increase in inventory and a $40,000 increase in accounts payable during the year. Cost of Goods Sold for the year was $1,200,000. The cash payments made to suppliers were:

Answer 1

Answer:

The cash payments made to suppliers were $1,280,000

Explanation:

Cash Payment made to the supplier can be calculated using the following formula

Cash Payment made to suppliers = Cost of Goods Sold + Increase in Inventory - Increase in account payable

By Placing values in the formula

Cash Payment made to suppliers = $1,200,000 + $120,000 - $40,000

ash Payment made to suppliers = $1,280,000