The financial statements for Warren Company show the following:
Cost of goods sold $725,000
$$\begin{array} { | l | r | r | }
\hline & \text { Beginning Balance } & \text { Ending Balance } \
\hline \text { Merchandise Irventory } & \$ 45,000 & \$ 56,000 \
\hline \text { Accounts Receivable } & 53,000 & 50,000 \
\hline \text { Accounts Payable } & 37,000 & 42,000 \
\hline
\end{array}$$
Based on this information,cash paid for merchandise was:
A) $736,000
B) $719,000
C) $731,000
D) $741,000

Question

The financial statements for Warren Company show the following:
Cost of goods sold $725,000
$$\begin{array} { | l | r | r | } 
\hline & \text { Beginning Balance } & \text { Ending Balance } \
\hline \text { Merchandise Irventory } & \$ 45,000 & \$ 56,000 \
\hline \text { Accounts Receivable } & 53,000 & 50,000 \
\hline \text { Accounts Payable } & 37,000 & 42,000 \
\hline
\end{array}$$
Based on this information,cash paid for merchandise was:
A) $736,000
B) $719,000
C) $731,000
D) $741,000

Quizplus · Accepted Answer

The cash paid for merchandise is calculated as: Cost of Goods Sold + Increase in Inventory - Increase in Accounts Payable = $725,000 + ($56,000 - $45,000) - ($42,000 - $37,000) = $731,000.

The Financial Statements for Warren Company Show the Following: Cost

The Financial Statements for Warren Company Show the Following:
Cost