Answer:
Cash payment for merchandise = $12,749
Explanation:
As we know that:
Opening Inventory + Purchases made during the year - Closing Inventory = Inventory sold during the year
We know, the value of opening, closing and sold inventory we this we can compute the value of inventory purchased during the year.
Putting values we have:
$3,814 + Purchases - $4,038 = $12,265
Purchases = $12,265 + $4,038 - $3,814 = $12,489
Also the equation for calculating the payments shall be:
Opening Accounts Payable + Inventory purchased - Closing Accounts Payable = Cash paid during the year for merchandise.
$1,511 + $12,489 - $1,251 = Cash paid
$12,749 = Cash paid
