Bertram,Inc.had a beginning and ending accounts payableAccounts Payable balances of $400 and $450,respectively.Inventory had beginning and ending balances of $450 and $425,respectively.All inventory purchases are made on account.If cost of goods sold was cost of goods sold equaled $350,how much cash was spent to obtain purchase inventory?
A) $275
B) $250
C) $400
D) $350

Question

Quizplus · Accepted Answer

Beginning balance of Inventory + Cash outflow to purchase inventory - Cost of goods sold = Ending balance of Inventory
$450 + Cash outflow to purchase inventory - $350 = $425
Cash outflow to purchase inventory = $425 - $450 + $350 = $325
Beginning balance of Accounts Payable + Inventory purchases - Payments on account = Ending balance of Accounts Payable
$400 + $325 (calculated above)- Payments on account = $450
Payments on account = $400 + $325 - $450 = $275