Rice Export Corp. had an increase in inventory of $ 40,000. The cost of goods sold was $ 90,000. There was a $ 5,000 decrease in accounts payable from the prior period. What were Rice Export's cash payments to suppliers?
A) $ 135,000
B) $ 85,000
C) $ 125,000
D) $ 95,000

Question

Quizplus · Accepted Answer

Cost of goods sold = Beginning inventory + Purchases - Ending inventory$90,000 = Beginning inventory + Purchases - $40,000Purchases = $90,000 + $40,000 = $130,000Cash payments to suppliers = Purchases + Decrease in accounts payableCash payments to suppliers = $130,000 + $5,000 = $135,000