Squeeze Company Reports the Following If Cost of Goods Sold for the Year Is $220000

question 172

Multiple Choice

Squeeze Company reports the following: $$\begin{array} { l c c } & \text { End of Year } & \text { Beginning of Year } \\\text { Inventory } & \$ 25,000 & \$ 42,000 \\\text { Accounts Payable } & 22,000 & 12,000\end{array}$$ If cost of goods sold for the year is $220000 the amount of cash paid to suppliers is

• A) $227000.
• B) $205000.
• C) $193000.
• D) $247000.

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Definitions:

Accounting Rate of Return

A financial metric used to measure the profitability of an investment, calculated by dividing the average annual profit by the initial investment cost.

After-Tax Income

The amount of money an individual or company retains after all federal, state, and withholding taxes have been deducted from taxable income.

Payback Period

The time it takes for an investment to generate an amount of income or cash flow to recover the cost of the investment, indicating the investment's risk and liquidity.

Annual Cash Inflows

The total amount of money received by a company or individual in a year from various sources, excluding borrowings.