Data Solutions reports cost of goods sold of $75 million.Inventory at the beginning and end of the year are $8 million and $9 million,respectively.Accounts payable at the beginning and end of the year are $5 million and $3 million,respectively.What is the amount of cash paid to suppliers?
A)$78 million.
B)$72 million.
C)$75 million.

Question

Quizplus · Accepted Answer

The cash paid to suppliers can be calculated using the formula: Cash Paid to Suppliers = Cost of Goods Sold + Increase in Inventory - Decrease in Accounts Payable. Here, Cost of Goods Sold = $75 million, Increase in Inventory = End Inventory - Beginning Inventory = $9 million - $8 million = $1 million, and Decrease in Accounts Payable = Beginning Accounts Payable - End Accounts Payable = $5 million - $3 million = $2 million. Therefore, Cash Paid to Suppliers = $75 million + $1 million - $2 million = $74 million. However, since $74 million is not an option and there seems to be a mistake in my calculation, let's correct the approach: Cash Paid to Suppliers = Cost of Goods Sold + Increase in Inventory + Decrease in Accounts Payable = $75 million + ($9 million - $8 million) + ($5 million - $3 million) = $75 million + $1 million + $2 million = $78 million.

Data Solutions Reports Cost of Goods Sold of $75 Million