Question

Selected data for the current year ended December 31 are as follows:

Answer 1

Answer and Explanation:

The computation is shown below:

Cash paid for Merchandise

Cost of Goods Sold $620,000

Add: Ending inventory $42,500

Less: Beginning inventory $68,000

Purchases made during the year $594,500

Add: Opening balance of accounts payable $135,000

Less: Ending balance of  accounts payable $90,000

Cash paid for Merchandise $639,500

Cash paid for Operating Expenses

Operating expenses $142,000

Add: Ending Prepaid expense $23,000

Less: Beginning prepaid expense $20,000

Add: Beginning balance of accrued expenses $22,000

Less: Ending  balance of accrued expenses $29,500

Cash paid for operating expenses $137,500