The Merchandise Inventory for Year 1 was $100,000 and for Year 2 was $94,000.The Accounts Payable account for Year 1 was $40,000 and for Year 2 was $42,000.Cost of goods sold for Year 2 was $460,000.What was the total amount for cash payments for merchandise for Year 2?
A)$448,000
B)$449,000
C)$452,000
D)$456,000
E)$84,000

Question

Quizplus · Accepted Answer

The formula for calculating total amount for cash payments for merchandise is:
Cash payments for merchandise = Cost of goods sold - Decrease in merchandise inventory + Increase in accounts payable
= $460,000 - ($94,000 - $100,000) + ($42,000 - $40,000)
= $460,000 - (-$6,000) + $2,000
= $452,000
Therefore, the best choice is C.

The Merchandise Inventory for Year 1 Was $100,000 and for Year