Question

Electronic Superstore's inventory increases during the year by $4.5 million, and its accounts payable to suppliers increases by $6.5 million during the same period. What is the amount of cash paid to suppliers of merchandise during the reporting period if its cost of goods sold is $40.0 million? (Round your answers to 1 decimal place. Enter your answers in millions (i.e., $10,100,000 should be entered as 10.1).)

Answer 1

Answer:

$38.0 millions

Explanation:

Cash paid to suppliers of merchandise  = Cost of Goods Sold + Increase in inventory - Increase in accounts payable

Therefore, we have:

Cash paid to suppliers of merchandise = $40.0 millions + $4.5 millions - $6.5 millions = $38.0 millions