The cost of merchandise sold reported on the income statement was $240,000. The accounts payable balance increased $12,000,

The cost of merchandise sold reported on the income statement was $240,000. The accounts payable balance increased $12,000, and the inventory balance increased by $19,200 over the year. Determine the amount of cash paid for merchandise.


Answer:






Cost of merchandise sold……………………………………………………………… $240,000
Add increase in inventories……………………………………………………………… 19,200
Deduct increase in accounts payable………………………………………………… (12,000)
Cash paid for merchandise……………………………………………………………… $247,200