Question

A. The Gap purchased inventories totaling $10,392 million for the fiscal year ended February 2, 2019. Use the financial statement effects template to record cost of goods sold for The Gap's fiscal year ended February 2, 2019. (Assume accounts payable is used only for recording purchases of inventories and all inventories are purchased on credit.)
b. What amount did the company pay to suppliers during the year? Record this with the financial statement effects template.

I'm not sure how to show these amounts on the financial statement effects template.

Answer 1

The cost of goods sold is $10,258 million and the Cash paid to supplier is $10,447 million.

Cost of goods sold

a. Cost of goods sold

Cost of Goods Sold=Beginning Inventories + Purchases – Ending Inventories

Cost of goods sold = $1,997 + $10,392 - $2,131

Cost of goods sold = $10,258

b. Cash paid to supplier

Cash paid=2015 Beginning balance  + Purchases - 2015 Ending balance

Cash paid = $1,181 + $10,392 - $1,126

Cash paid = $10,447

Therefore the cost of goods sold is $10,258 million and the Cash paid to supplier is $10,447 million.

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