Question

Determine the amount of cash paid to suppliers of merchandise for each of the nine independent...

Determine the amount of cash paid to suppliers of merchandise for each of the nine independent situations below. All dollars are in millions. (Enter your answers in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5).)


Situation

Cost of Goods sold

Inventory Increase (Decrease)

Accounts Payable Increase (Decrease)

Cash Paid to Suppliers

1

135.0

0

0

2

135.0

4.4

0

3

135.0

(4.4)

0

4

135.0

0

9.1

5

135.0

0

(9.1)

6

135.0

4.4

9.1

7

135.0

4.4

(9.1)

8

135.0

(4.4)

(9.1)

9

135.0

(4.4)

9.1
Business   Accounting   
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Homework Answers

Answer #1

Cash paid to supplier = cost of goods sold + inventory increase - accounts payable increase

Situation cost of goods sold inventory increase (decrease) accounts payable increase (decrease) cash paid to supplier
1 135 0 0 135
2 135 4.4 0 139.4
3 135 (4.4) 0 130.6
4 135 0 9.1 125.9
5 135 0 (9.1) 144.1
6 135 4.4 9.1 130.3
7 135 4.4 (9.1) 148.5
8 135 (4.4) (9.1) 139.7
9 135 (4.4) 9.1 121.5

Note:

increase in inventory is added to cost of goods sold because it denotes cash payment made to supplier.

increase in accounts payable is deducted from cost of goods sold because it denotes increase in cash and therefore decrease in cash payment made to supplier

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