Exercise 21-2 Determine cash paid to suppliers of merchandise [LO21-3, 21-6] Sho

Question

Exercise 21-2 Determine cash paid to suppliers of merchandise [LO21-3, 21-6] Shown below in T-account format are the beginning and ending balances ($ in millions) of both inventory and accounts payable Beginning balance Ending balance Inventory 90 93 Accounts Payable Beginning balance Ending balance Required 1. Use a T-account analysis to determine the amount of cash paid to suppliers of merchandise during the reporting period if cost of goods sold was $300 million. (Enter your answer in millions (i.e., 10,000,000 should be entered as 10).) Answer is not complete. Cash paid to suppliers million 2. Prepare a summary entry that represents the net effect of merchandise purchases during the reporting period. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions (i.e., 10,000,000 should be entered as 10).) Answer is not complete. No Event General Journal Debit Credit Inventory Cost of goods sold Accounts payable

Explanation / Answer

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Inventory Ending balance 93 Add: cost of goods sold 300 393 Less:Opening balance 90 Purchase 303 Accounts Payable Beginning balance 14 Add: Purchase 303 317 Less: Ending balance 16 Cash paid to customer 301

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