The following amounts are taken from Wellington Cabinets' financial statements: $\begin{array}{lrr}&2017&2018\
\text { Merchandise inventory } & \$ 600,000 & \$ 700,000 \
\text { Accounts payable } & 70,000 & 110,000 \
\text { Cost of qoods sold } & 3,100,000 & 4,200,000
\end{array}$ The company uses accounts payable only for purchases of merchandise inventory.What amount of cash did Wellington Cabinets pay to for inventory during 2018?

Question

Quizplus · Accepted Answer

To calculate the cash paid for inventory during 2018, we use the formula: Cash Paid for Inventory = Cost of Goods Sold + Ending Inventory - Beginning Inventory + Beginning Accounts Payable - Ending Accounts Payable. Plugging in the values: $4,200,000 + 700,000 - 600,000 + 70,000 - 110,000 = 4,260,000$.

The Following Amounts Are Taken from Wellington Cabinets' Financial Statements