Stockton- Meadows Incorporated reports an increase in Accounts Payable of $9,200 and an increase in inventory of $45,000 for the current year. Accounts Payable relates solely to the purchase of merchandise. Sales on account were $532,100 and cost of goods sold was $358,000. The payments to suppliers for inventory during the period were:

Question

Quizplus · Accepted Answer

The payments to suppliers can be calculated using the formula: Beginning Accounts Payable + Purchases - Ending Accounts Payable = Payments to Suppliers. Since we know the increase in Accounts Payable is $9,200, and the increase in inventory is $45,000, we can calculate Purchases as Cost of Goods Sold + Increase in Inventory = $358,000 + $45,000 = $403,000. Therefore, Payments to Suppliers = $403,000 - $9,200 = $393,800.

Stockton- Meadows Incorporated Reports an Increase in Accounts Payable of $9,200