Pepper Company reports a $120,000 increase in inventory and a $40,000 increase in accounts payable during the year. Cost of Goods Sold for the year was $1,200,000. The cash payments made to suppliers were:
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Given :
Cost of goods sold = $1,200,000
Increase in inventory = $120,000
Increase in accounts payable = $40,000
So, the cash payment made to supplier = $(1,200,000 + 120,000 - 40,000)
= $ 1,280,000