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9 June, 15:04

A company purchases its inventory from suppliers on account. During the year, its inventory account increased by $16 million and its accounts payable to suppliers decreased by $4 million. If cost of goods sold was $500 million, its cash outflows to inventory suppliers totaled:

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  1. 9 June, 16:18
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    cash outflows to inventory suppliers totaled: $512 million

    Explanation:

    Calculation of Cash flows to inventory suppliers:

    Cost of goods sold $500 million

    Less decrease in Accounts payable ($4 million)

    Add Increase in Inventory $16 million

    Cash outflows to inventory suppliers $512 million
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