The following data have been extracted from finncil statement of xyz Inc. a cale

Question

The following data have been extracted from finncil statement of xyz Inc. a calende year merchandising corporation.
December 31
balance sheet 2011 2012
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Trade A/C rec - net $84,000 $78,000
Inventory 150,000 140000
A/c Pay merch (CR) (95000) (98,000)

* Total sales for 2012 were $ 1,200,00 and for 20111 were$ 1,100,000. Cash sales were 20% of total sales each year.
* COGS was $840,000 for 2012

* Variable general and administrative (G&A) expenses for 2012 were $120,000. These expenses have varied in proportion to sales and have been paid at the rate of 50% in he year incurred and 50% the following year. Unpaid G&A expenses are not included in a accounts payable.
*Fixed G&A expenses, including #35,000 depreciation and $5000 bad debt expenses, totalled $100,000 each year. The amount of such expenses involving cash payment was paid at the rate of 80% in the year incured and 20% the following year. In each year, there was a $5,000 bad debt estimate and a $ 5000 write off. Unpaid G&A expenses are not included in accounts paybale.
Requied:
Compute the amount of cash disbursed during 2012 from purchase of merchandise?

Explanation / Answer

amount of cash disbursed during 2012 from purchase of merchandise = ichange in inventory = 150000- 140000 =$10,000

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