Northwest Builders,Inc.reported Cost of Goods Sold for the current year of $320,000.During the same period,the Inventory account decreased $15,000 and the Accounts Payable account increased $25,000.The amount of cash paid to suppliers for inventory is:
A)$280,000.
B)$295,000.
C)$305,000.
D)$335,000.

Question

Quizplus · Accepted Answer

Cost of Goods Sold = Beginning Inventory + Purchases - Ending Inventory$320,000 = Beginning Inventory + Purchases - ($15,000)Purchases = $320,000 + $15,000 = $335,000Cash paid to suppliers = Purchases - Increase in Accounts PayableCash paid to suppliers = $335,000 - $25,000 = $310,000