The financial statements for Ozzie Company show the following: $$\begin{array} { | l | r | r | }
\hline & \text { Beginning balance } & \text { Ending balance } \
\hline \text { Merchandise inventory } & \$ 25,000 & \$ 26,000 \
\hline \text { Trade receivables } & 35,000 & 33,000 \
\hline \text { Trade payables } & 18,000 & 21,000 \
\hline \text { Cost of Goods Sold } & & \$ 121,000 \
\hline
\end{array}$$ How much cash was paid for merchandise?
A) $117,000.
B) $119,000.
C) $121,000.
D) $124,000.

Question

The financial statements for Ozzie Company show the following: $$\begin{array} { | l | r | r | } 
\hline & \text { Beginning balance } & \text { Ending balance } \
\hline \text { Merchandise inventory } & \$ 25,000 & \$ 26,000 \
\hline \text { Trade receivables } & 35,000 & 33,000 \
\hline \text { Trade payables } & 18,000 & 21,000 \
\hline \text { Cost of Goods Sold } & & \$ 121,000 \
\hline
\end{array}$$ How much cash was paid for merchandise?
A) $117,000.
B) $119,000.
C) $121,000.
D) $124,000.

Quizplus · Accepted Answer

The cash paid for merchandise is calculated as: COGS + Increase in Inventory - Increase in Payables = $121,000 + ($26,000 - $25,000) - ($21,000 - $18,000) = $121,000 + $1,000 - $3,000 = $119,000.

The Financial Statements for Ozzie Company Show the Following How Much Cash Was Paid for Merchandise? A) $117,000

The Financial Statements for Ozzie Company Show the Following How Much Cash Was Paid for Merchandise?
A) $117,000