Use the following information about the current year's operations of a company to calculate the cash paid for merchandise. $\begin{array}{|l|r|}
\hline \text { Cost of good sold } & \$ 536,000 \
\hline \text { Merchandise inventory, January 1 } & 64,800 \
\hline \text { Merchandise inventory, December 31 } & 57,000 \
\hline \text { Accounts payable, January 1 } & 64,400 \
\hline \text { Accounts payable, December 31 } & 59,000\
\hline
\end{array}$
A)$522,800
B)$533,600
C)$528,200
D)$536,000
E)$543,800

Question

Quizplus · Accepted Answer

To calculate cash paid for merchandise, we need to use the formula: 
Cash paid for merchandise = Cost of goods sold + Increase in accounts payable - Decrease in merchandise inventory
From the information given, we can calculate:
Increase in accounts payable = Accounts payable, January 1 - Accounts payable, December 31 = $64,400 - $59,000 = $5,400
Decrease in merchandise inventory = Merchandise inventory, January 1 - Merchandise inventory, December 31 = $64,800 - $57,000 = $7,800
Using the formula above, we get:
Cash paid for merchandise = $536,000 + $5,400 - $7,800 = $533,600
Therefore, the best choice is (B), $533,600.

Use the Following Information About the Current Year's Operations of a Company