Plymouth Corporation reported an increase in inventory of $75,000. The cost of goods sold for the year was $180,000. There was also a $7,000 decrease in accounts payable from the beginning of the year to the end of the year. What were Plymouth's cash payments to suppliers?
A) $262,000
B) $248,000
C) $255,000
D) $187,000

Question

Quizplus · Accepted Answer

The increase in inventory and the decrease in accounts payable represent an increase in cash payments to suppliers. The cost of goods sold is not relevant to this calculation. Therefore, the cash payments to suppliers are $75,000 + $7,000 = $82,000. Adding this to the cost of goods sold of $180,000 gives $262,000.

Plymouth Corporation Reported an Increase in Inventory of $75,000