Question

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?

Answer 1

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