The following information is extracted from the financial records of ABC Company:

• Sales revenue for the year ended 31 December 2022: $5,000,000
• Cost of goods sold: $2,500,000
• Gross profit margin: 50%
• Inventory balance at the beginning of the year: $300,000
• Inventory balance at the end of the year: $450,000
• Accounts payable balance at the beginning of the year: $150,000
• Accounts payable balance at the end of the year: $300,000
• Accounts receivable balance at the beginning of the year: $400,000
• Accounts receivable balance at the end of the year: $600,000
• Bad debts expense for the year: $50,000
• Days sales outstanding (DSO) for the year: 60 days
• Days payable outstanding (DPO) for the year: 45 days

Assuming that ABC Company uses the perpetual inventory system, calculate the following:

a) The amount of inventory purchased during the year. (5 marks)

b) The amount of cash paid for inventory purchases during the year. (5 marks)

c) The amount of cash collected from customers during the year. (5 marks)

d) The amount of cash paid to suppliers during the year. (5 marks)

Answer rating: 100% (QA)

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