Question

The financial statements of Seldin, Inc., provide the following information for the current year: Dec.31 Jan.1 Accounts receivable $ 35,000 $ 40,000 Inventory $ 55,000 $ 51,000 Prepaid expenses $ 12,000 $ 14,000 Accounts payable (for merchandise) $ 33,000 $ 32,000 Accrued expenses payable $ 15,000 $ 20,000 Net sales $ 260,000 Cost of goods sold $ 130,000 Operating expenses (including depreciation of $18,000) $ 80,000 Compute the amount of Seldin's cash payments for purchases of merchandise during the current year. Group of answer choices $133,000 $125,000 $130,000 $127,000

Answer 1

Answer:

a. $133,000

Explanation:

Computation of inventory purchased  

Beginning                                   ($51,000)

Cost of goods sold                     $130,000

Ending                                         $55,000

Purchases during the year       $134,000

Computation of amount paid for purchases    

Beginning payable                                                   $32,000

Purchase during the year                                        $134,000

Ending payable                                                        ($33,000)

Cash payments for purchases of merchandise   $133,000