Answer:
Cost of merchandise sold………………………………………………………………… $770,000
Deduct decrease in inventories………………………………………………………… (66,000)
Add decrease in accounts payable……………………………………………………… 44,000
Cash paid for merchandise……………………………………………………………… $748,000
PE 16-7A Cash payments for merchandise—direct method
The cost of merchandise sold reported on the income statement was $770,000. The accounts payable balance decreased $44,000, and the inventory balance decreased by $66,000 over the year. Determine the amount of cash paid for merchandise.
Answer:
Cost of merchandise sold………………………………………………………………… $770,000
Deduct decrease in inventories………………………………………………………… (66,000)
Add decrease in accounts payable……………………………………………………… 44,000
Cash paid for merchandise……………………………………………………………… $748,000
Answer:
Cost of merchandise sold………………………………………………………………… $770,000
Deduct decrease in inventories………………………………………………………… (66,000)
Add decrease in accounts payable……………………………………………………… 44,000
Cash paid for merchandise……………………………………………………………… $748,000