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15 November, 06:52

The income statement for Splish Traveler Company shows cost of goods sold $307,000 and operating expenses (exclusive of depreciation) $229,000. The comparative balance sheet for the year shows that inventory increased $25,800, prepaid expenses decreased $8,000, accounts payable (related to merchandise) decreased $16,900, and accrued expenses payable increased $11,100.

Compute (a) cash payments to suppliers and (b) cash payments for operating expenses.

(a) Cash payments to suppliers $

(b) Cash payments for operating expenses $

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Answers (1)
  1. 15 November, 07:03
    0
    a. $349,700

    b. $209,900

    Explanation:

    The computation is shown below:

    Before computing the cash payment made to supplier first we have to find out the purchase amount which is shown below:

    (a) Change in Finished goods + purchase = Cost of goods sold

    -$25,800 + purchases = $307,000

    So, the purchase is $332,800

    Now

    Cash paid to supplier is

    = $332,800 + $16,900

    = $349,700

    And,

    (b) Cash paid for operating expenses is

    = $229,000 - $8,000 - $11,100

    = $209,900
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