Question

he 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.

Answer 1

Answer:

$133,000

Explanation:

Computation to determine the amount of Seldin's cash payments for purchases of merchandise during the current year

First step is to calculate the Purchases during the year

Beginning ($51,000)

Cost of goods sold $130,000

Ending $55,000

Purchases during the year $134,000

Now let calculate the amount of Seldin's cash payments for purchases of merchandise

Beginning payable $32,000

Purchase during the year $134,000

Less Ending payable ($33,000)

Cash payments for purchases of merchandise $133,000

Therefore the amount of Seldin's cash payments for purchases of merchandise during the current year is $133,000