If credit purchases are $100 000 determine the cash paid for the purchase of inventory for 2015.
Beginning accounts payable $42 000
Ending accounts payable 36 000

Question

Quizplus · Accepted Answer

The cash paid for inventory is the difference between the credit purchases and the change in accounts payable. 
Cash paid for inventory = Credit purchases - (Ending accounts payable - Beginning accounts payable)
Cash paid for inventory = $100 000 - ($36 000 - $42 000) 
Cash paid for inventory = $100 000 - (-$6 000) 
Cash paid for inventory = $106 000

If Credit Purchases Are $100 000 Determine the Cash Paid