Question 16.7: Cash Payments for Merchandise—Direct Method The cost of mer...
Cash Payments for Merchandise—Direct Method
The cost of merchandise sold reported on the income statement was $145,000. The accounts payable balance increased by $4,000, and the inventory balance increased by $9,000 over the year. Determine the amount of cash paid for merchandise.
Cost of merchandise sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 145,000
Increase in inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,000
Increase in accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . \underline{(4,000)}
Cash paid for merchandise . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . \underline{\$ 150,000}