In 2020, Nutrient Company reported sales of $725,000 and cost of goods sold of $480,000. During 2020, Nutrient's Inventory account increased $25,000 and its Accounts Payable account (which
Relates solely to the purchase of merchandise) decreased $18,000. Nutrient Company's payments to suppliers for inventory during 2020 were:

Question

Quizplus · Accepted Answer

The payments to suppliers can be calculated by starting with the cost of goods sold ($480,000), adding the increase in inventory ($25,000), and subtracting the decrease in accounts payable ($18,000). This results in $480,000 + $25,000 - $18,000 = $487,000. However, the correct calculation should include the increase in inventory, which means adding it, not subtracting. Thus, the correct calculation is $480,000 + $25,000 + $18,000 = $523,000.

In 2020, Nutrient Company Reported Sales of $725,000 and Cost