Statler Corporation has beginning and ending accounts payable balances of $400 and $800,respectively.Inventory had beginning and ending balances of $700 and $600,respectively.If cost of goods sold was $2,800,how much cash was spent to purchase inventory?
A)$2,100
B)$2,500
C)$2,700
D)None of these answer choices is correct

Question

Quizplus · Accepted Answer

Ending balance of inventory of $600 = Beginning balance of inventory of $700 + Increase due to inventory purchased on account (the unknown)- Decrease due to cost of goods sold of $2,800
Inventory purchased on account = $600 - $700 + $2,800 = $2,700
Ending balance of accounts payable of $800 = Beginning balance of accounts payable of $400 + Increase due to inventory purchased on account of $2,700 - Decrease due to cash paid for inventory (the unknown)
Cash paid for inventory = $400 + $2,700 - $800 = $2,300

Statler Corporation Has Beginning and Ending Accounts Payable Balances of $400