EX 16-20 Cash paid for merchandise purchases

The cost of merchandise sold for Kohl’s Corporation for a recent year was $15,480 million. The balance sheet showed the following current account balances (in millions):


Balance,
End of Year
Balance,
Beginning of Year
Merchandise inventories $4,050 $3,420
Accounts payable 1,494 1,260


Determine the amount of cash payments for merchandise.


Answer:

Cost of merchandise sold*………………………………………………………………… $15,480
Add increase in merchandise inventories……………………………………………… 630
Deduct increase in accounts payable…………………………………………………… (234)
Cash paid for merchandise………………………………………………………………… $15,876
*In millions