If cost of sales is $300 000, inventory has increased by $12 000 and creditors have decreased by $20 000 what is the amount of cash paid for the purchase of goods for resale?

Question

Quizplus · Accepted Answer

The cash paid for the purchase of goods for resale is calculated by adjusting the cost of sales for changes in inventory and creditors. The formula is: Cash Paid = Cost of Sales + Increase in Inventory - Decrease in Creditors. Plugging in the given values: $300,000 + $12,000 - (-$20,000) = $332,000.

If Cost of Sales Is $300 000, Inventory Has Increased