The Cleaver Corporation has beginning inventory of $100,000 and ending inventory of $80,000.Cost of goods sold is $307,500.Beginning accounts payable is $52,500 and ending accounts payable is $40,000.How much are cash payments to suppliers for inventory?

Question

Quizplus · Accepted Answer

Cash payments to suppliers can be calculated using the formula: Beginning Inventory + Purchases - Ending Inventory = Cost of Goods Sold. Rearranging for Purchases gives: Purchases = Cost of Goods Sold + Ending Inventory - Beginning Inventory. Then, Cash Payments = Purchases + Beginning Accounts Payable - Ending Accounts Payable. Substituting the values: Purchases = $307,500 + $80,000 - $100,000 = $287,500. Cash Payments = $287,500 + $52,500 - $40,000 = $300,000.

The Cleaver Corporation Has Beginning Inventory of $100,000 and Ending