Question

Electronic Superstore’s inventory increases during the year by $3.1 million, and its accounts payable to suppliers increases by $5.1 million during the same period. What is the amount of cash paid to suppliers of merchandise during the reporting period if its cost of goods sold is $26.0 million?

Answer 1

$24 million

Step-by-step explanation:

The computation of the cash paid to suppliers of merchandise is shown below:

= Cost of goods sold + increase in inventory - increase in accounts payable

= $26.0 million + $3.1 million - $5.1 million

= $24 million

Simply we added the increase in inventory and deduct the increase in accounts payable in the cost of goods sold so that the accurate amount can come.