Assume a merchandising company had credit sales of $380,000, cost of goods sold of $200,000, and net income of $60,000. It provided the following excerpts from its balance sheet:

	This Year				Last Year
Current assets:
Accounts receivable	$	40,000			$	46,000
Inventory	$	53,000			$	50,000
Prepaid expenses	$	13,000			$	11,000
Current liabilities:
Accounts payable	$	39,000			$	44,000
Income taxes payable	$	13,000			$	10,000

If the company purchases its merchandise inventory on account, then based solely on the information provided, the company’s cash paid for inventory purchases would be:

Multiple Choice

• $208,000.

• $202,000.

• $198,000.

• $192,000.

Answer rating: 100% (QA)

Cost of goods sold Add Ending Inventory This year Less B... View the full answer