Use the Following Information About the Current Year's Operations of a Company

question 56

Multiple Choice

Use the following information about the current year's operations of a company to calculate the cash paid for merchandise.
$$\begin{array} { | l | r | } \hline \text { Cost of goods sold } \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots & \$ 500,000 \\\hline \text { Merchandise inventory, January } 1 \ldots \ldots \ldots \ldots \ldots \ldots & 85,000 \\\hline \text { Merchandise inventory, December } 31 \ldots \ldots \ldots \ldots \ldots & 97,000 \\\hline \text { Accounts payable, January } 1 \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots & 68,000 \\\hline \text { Accounts payable, December } 31 \ldots \ldots \ldots \ldots \ldots \ldots & 60,000 \\\hline\end{array}$$

• A) $585,000.
• B) $520,000.
• C) $480,000.
• D) $508,000.
• E) $512,000.

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Definitions:

Capital Gains Yield

Results from changing prices and is calculated as (P1 - P0)/P0, where P0 is the beginning-of-period price and P1 is the end-of-period price.

Yield To Maturity

The total return anticipated on a bond if it is held until the end of its lifetime.

Current Yield

Current yield is a financial term used to describe the annual income (interest or dividends) earned from an investment, expressed as a percentage of the current price of the security.

Coupon Rate

The yearly interest yield from a bond, shown as a percentage of its nominal value.