If credit purchases are $100 000 determine the cash paid for the purchase of inventory for 2014. $$\begin{array} { l r }
\text { Beginning accounts payable } & \$ 30000 \
\text { Ending accounts payable } & 42000
\end{array}$$

Question

If credit purchases are $100 000 determine the cash paid for the purchase of inventory for 2014. $$\begin{array} { l r } 
\text { Beginning accounts payable } & \$ 30000 \
\text { Ending accounts payable } & 42000
\end{array}$$

Quizplus · Accepted Answer

The increase in accounts payable is $12,000 ($42,000 - $30,000). This means that $12,000 of the credit purchases were not paid for in 2014. Therefore, the cash paid for the purchase of inventory for 2014 is $100,000 - $12,000 = $88,000.