The financial statements for Warren Company show the following:
Cost of goods sold $725,000
$\begin{array}{|l|l|l|}
\hline & \text { Begiuning Balance } &\text { Eurling Bnlance }\
\hline \text { Merchandise Inventory } & \$ 45,000&\$56,000 \
\hline \text { Accounts Receivable } & 53,000 &50,000\
\hline \text { Accounts Payable } & 37,000&42,000\
\hline
\end{array}$
Based on this information, cash paid for merchandise was
A) $736,000
B) $719,000
C) $731,000
D) $741,000

Question

The financial statements for Warren Company show the following: 
Cost of goods sold $725,000
$\begin{array}{|l|l|l|}
\hline & \text { Begiuning Balance } &\text { Eurling Bnlance }\
\hline \text { Merchandise Inventory } & \$ 45,000&\$56,000 \
\hline \text { Accounts Receivable } & 53,000 &50,000\
\hline \text { Accounts Payable } & 37,000&42,000\
\hline 
\end{array}$
 Based on this information, cash paid for merchandise was
A) $736,000
B) $719,000
C) $731,000
D) $741,000

Quizplus · Accepted Answer

The cash paid for merchandise is calculated as: Beginning Inventory + Purchases - Ending Inventory = Cost of Goods Sold. Purchases = COGS + Ending Inventory - Beginning Inventory = $725,000 + $56,000 - $45,000 = $736,000. Cash paid = Purchases - Increase in Accounts Payable = $736,000 - ($42,000 - $37,000) = $731,000.

The Financial Statements for Warren Company Show the Following Based on This Information, Cash Paid for Merchandise Was A)

The Financial Statements for Warren Company Show the Following Based on This Information, Cash Paid for Merchandise Was
A)