The general ledger of AXM, Inc., provides the following information relating to purchases of merchandise. End of Year Beginning of Year Inventory $852,000 $780,000 Accounts payable to merchandise suppliers 454,000 500,000 The company's cost of goods sold during the year was $2,160,000. Compute the amount of cash payments made during the year to suppliers of merchandise.

$2,278,000

Explanation:

We need to Calculate the total Purchases made by Company

Purchases = Cost of goods Sold + closing Inventory - Opening Inventory  

Purchases = 2,160,000 + 852,000 - 780,000  = $2,232,000

Now we calculate the cash paid to supplier:

Cash Payment = Opening accounts payable + purchases - Closing accounts payable  = $500,000 + $2,232,000 - $454,000 = $2,278,000

Thus, $2,278,000 is amount of cash payments made during the year to suppliers of merchandise.

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