A company's Inventory balance at 12/31/16 was $188,000 and $200,000 at 12/31/15.Its Accounts Payable balance at 12/31/16 was $84,000 and $80,000 at 12/31/15,and its cost of goods sold for 2016 was $720,000.The company's total amount of cash payments for merchandise in 2016 equals:

Question

Quizplus · Accepted Answer

The correct answer is A because the total amount of cash payments for merchandise in 2016 is equal to the cost of goods sold for 2016 plus the increase in accounts payable from 12/31/15 to 12/31/16, minus the increase in inventory from 12/31/15 to 12/31/16.

A Company's Inventory Balance at 12/31/16 Was $188,000 and $200,000