Dooling Corporation reported balances in the following accounts for the current year:

Beginning Ending

Inventories $600 $300

Accounts payable 300 500

Cost of goods sold was $7,500. What was the amount of cash paid to suppliers?

A. $7,000.

B. $7,200.

C. $7,300.

D. $7,500.

Option (A) is correct.

Explanation:

cost of goods purchased:

= Cost of goods sold + ending inventory - opening inventory

= $7,500 + $300 - $600

= $7,200

Amount paid to suppliers:

= cost of goods purchased - Increase in accounts payable

= $7,200 - (500 - 300)

= $7,200 - 200

= $7,000

Therefore, the amount of cash paid to suppliers is $7,000.