A company has a gross profit of Rs. 3,00,000 from the following
Sales Rs. 6,00,000
Cost of Goods sold Rs. 3,00,000
Comparison of this year and last year inventory and accounts
payable showed the following:
Increase in inventory Rs. 20,000
Decrease in Accounts payables Rs. 20,000
How much cash did the company paid to suppliers during the
year?
Answer: Cash paid to Suppliers = $340,000
Explanation:
We know that
Cash paid to Suppliers = Cost of Goods Sold +( Ending Inventory - Beginning Inventory) + (Beginning AP - Ending AP)
Given that,
Inventory is increased by $20000 compared to previous year therefore (Ending Inventory - Beginning Inventory ) = $20000
Accounts payables is Decreased by $20000 compared to previous year (Beginning AP - Ending AP) =$20000
Cash paid to Suppliers = $300,000 + $20000 +$20000 = $340,000
Get Answers For Free
Most questions answered within 1 hours.