Question Completion:
The GAP is a global clothing retailer for men, women, children, and babies. The following information is taken from The Gap's fiscal 2015 annual report.
Selected Balance Sheet Data ($ millions)
2015 2014
Inventories $1,901 $1,861
Accounts Payable 1,140 1,145
Answer:
The Gap
a) Cost of Goods Sold: $10,398
The cost of goods sold increases the Expenses and reduces the Net Income in the Income Statement.
b) The cash paid to suppliers is $10,443.
Explanation:
Data and Calculations:
Accounts Payable
Beginning balance $1,145
Purchases 10,438
Payment 10,443*
Ending balance 1,140
*Payment = Beginning balance Plus Purchases Minus Ending balance.
Cost of Goods Sold:
Beginning Inventories $1,861
Purchases 10,438
Ending Inventories (1,901)
Cost of goods sold $10,398
