A company had cost of goods sold of $150,000 during a given period. Compute cash paid for merchandise during this period given the following data: $$\begin{array} { | l | r | r | }
\hline&\text { Beginning } & \text { Ending } \
&\text { Balance } & \text { Balance }\
\hline \text { Accounts payable } & \$ 20,000 & \$ 17,500 \
\hline \text { Merchandise inventory } & 35,000 & 42,000\
\hline
\end{array}$$

Question

A company had cost of goods sold of $150,000 during a given period. Compute cash paid for merchandise during this period given the following data: $$\begin{array} { | l | r | r | } 
\hline&\text { Beginning } & \text { Ending } \
&\text { Balance } & \text { Balance }\
\hline \text { Accounts payable } & \$ 20,000 & \$ 17,500 \
\hline \text { Merchandise inventory } & 35,000 & 42,000\
\hline
\end{array}$$

Quizplus · Accepted Answer

To compute cash paid for merchandise, adjust the cost of goods sold for changes in inventory and accounts payable:  $$ \text{Cash paid} = \text{COGS} + (\text{Ending Inventory} - \text{Beginning Inventory}) - (\text{Ending Accounts Payable} - \text{Beginning Accounts Payable}) $$  $$ = 150,000 + (42,000 - 35,000) - (17,500 - 20,000) $$  $$ = 150,000 + 7,000 + 2,500 $$  $$ = 159,500 $$

A Company Had Cost of Goods Sold of $150,000 During