A company's Inventory balance at 12/31/13 was $188,000 and $200,000 at 12/31/12.Its Accounts Payable balance at 12/31/13 was $84,000 and $80,000 at 12/31/12,and its cost of goods sold for 2013 was $720,000.The company's total amount of cash payments for merchandise in 2013 equals:

Question

Quizplus · Accepted Answer

Decrease in merchandise = $200,000 - $188,000 = $12,000
Purchases = $720,000 - $12,000 = $708,000
Increase in Accounts Payable = $84,000 - $80,000 = $4,000
Cash paid for merchandise = $708,000 - $4,000 = $704,000

A Company's Inventory Balance at 12/31/13 Was $188,000 and $200,000