Question

A company has a gross profit of Rs. 3,00,000 from the following Sales Rs. 6,00,000 Cost...

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?

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Homework Answers

Answer #1

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

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