Tatum Company 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 Tatum's cash payments to suppliers?

Question

Quizplus · Accepted Answer

The increase in inventory and the decrease in accounts payable both represent an increase in cash payments to suppliers. Therefore, the cash payments to suppliers are $40,000 + $5,000 = $45,000. Adding this to the cost of goods sold of $90,000 gives a total of $135,000.

Tatum Company Had an Increase in Inventory of $40,000