Bates Company pays cash for all inventory purchases.Bates reports that it had a beginning inventory of $2,500 and an ending inventory of $900.Its cost of goods sold equaled $5,500.Based on this information,the amount of cash paid for inventory purchases was:

Question

Quizplus · Accepted Answer

Cost of goods sold = Beginning inventory + Purchases - Ending inventory$5,500 = $2,500 + Purchases - $900Purchases = $5,500 - $2,500 + $900Purchases = $3,900

Bates Company Pays Cash for All Inventory Purchases