Question

Relevant account balances for Martinez Corporation are: 12/31/17 $18,000 24,000 1.500 25.000 101/17 $14,000 26,000 2,100 26,000 Accounts receivable Inventory Prepaid insurance Accounts payable Income information for 2017 Revenue Cost of goods sold Insurance expense Operating expenses Depreciation Net income $120,000 $60,000 6,000 18,000 10000 94.000 $ 26000 How much cash was paid to suppliers for inventory during 2017? $2.000 $59,000 $63.000 $61.000

Answer 1

The Correct answer is option B i.e. 59,000

The same is illustrated below

Inventories Account
Date	Particulars	Amount (in $)          Debit	Date	Particulars	Amount (in $)          Credit
01-01-2017	To balance b/d	26,000	31-12-2017	By Cost of Goods sold	60,000
	To Accounts payable (Purchases)	58,000
	(Balancing Figure)
			31-12-2017	By balance b/d	24,000
		84,000			84,000
Accounts Payable Accounts
Date	Particulars	Amount (in $)          Debit	Date	Particulars	Amount (in $)          Credit
			01-01-2017	By balance b/d	26,000
	To Cash	59,000		By Inventory (purchases)	58,000
	(Balancing Figure)
31-12-2017	To balance b/d	25,000
		84,000			84,000
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