The following selected account balances were taken from ABC Company\'s general l

Question

 The following selected account balances were taken from ABC Company's general ledgers for 2019:                        January 1, 2019       December 31, 2019   Inventory                  49,000                52,000   Accounts payable           50,000                28,000   Salaries payable            9,000                 3,000   Investments                68,000                75,000   Accounts receivable        69,000                53,000   Land                       58,000                88,000   Notes payable             120,000                95,000   Common stock              100,000               170,000   Retained earnings          22,000                35,000  The following information was taken from ABC Company's 2019 income statement:    Sales revenue                   $430,000   Cost of goods sold               300,000   Salaries expense                  88,000   Net income                      $ 42,000  Calculate the amount of cash paid to suppliers for purchases of inventory during 2019. 

Explanation / Answer

Purchase = Cost of goods sold+ending inventory-beginning inventory

               = 300000+52000-49000

Purchase = 303000

Cash paid to suppliers for purchase of inventory = Beginning account payable+purchase-ending account payable

                                                                      = 50000+303000-28000

Cash paid to suppliers for purchase of inventory = 325000

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