LaRoe Lawns\' inventory increased during the year by $5.9 million. Its accounts

Question

LaRoe Lawns' inventory increased during the year by $5.9 million. Its accounts payable increased by $4.8 million during the same period. a. What is the amount of cash LaRoe paid to suppliers of merchandise during the reporting period if its cost of goods sold was $56.0 million? (Enter your answer in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5).) Cash million b. Prepare a summary entry that represents the net effect of merchandise purchases during the reporting period. (Enter your answers in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5). If no entry is required for an event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet Record the net effect of merchandise purchases. Note: Enter debits before credits. Event General Journal Debit Credit

Explanation / Answer

a.amount of cash paid to suppliers.

first,

let us know the amount of purchases made during the year

=> cost of goods sold = purchases + (opening stock - closing stock)

given that closing stock is $5.9 million more than opening stock

=> $56 million = purchases + (- $5.9 million)

=> purchases = $56 million + $5.9 million

=>$61.9 million.

now,

cash paid to suppliers = purchases + (opening accounts payable - closing accounts payable)

given that accounts payable increases by $4.8 million

=>cash paid to suppliers = $61.9 million + (- $4.8 million)

=>cash paid to suppliers =>$57.10 million.

the following is the summary entry:

1 Cost of goods sold $56 . Inventory $5.9 .. .............To Cash a/c $57.10 .............To Accounts payable $4.80

Related Questions

Navigate

• Browse (All)
• Browse L
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.