A company's Inventory account increased $28,300 and its Accounts payable account decreased $20,000 during the year.The Accounts payable relates only to the acquisition of inventory.Sales were $795,900 and Cost of sales was $549,800.What was the payment made to the suppliers of inventory?

Question

Quizplus · Accepted Answer

The payment made to the suppliers of inventory can be calculated using the following formula:

Payment to suppliers = Increase in Inventory - Decrease in Accounts payable

Therefore,

Payment to suppliers = $28,300 - (-$20,000)   [accounts payable decreased]

Payment to suppliers = $28,300 + $20,000

Payment to suppliers = $48,300

Hence, the correct answer is option C.

A Company's Inventory Account Increased $28,300 and Its Accounts Payable