Burkhart Enterprises wants you to prepare a spreadsheet to answer the following questions:
A. Purchases (net of discount) of inventory were $500,000 during the period. The beginning balance of accounts payable was $40,000, while the ending balance was $25,000. A purchase of $4,000 (net) was returned during the period. How much cash was paid for inventory during the period?
B. Cash paid for inventory during the period was $400,000. The beginning and ending balances of accounts payable were $10,000 and $12,000, respectively. Cash discounts of $2,500 were lost during the period. No purchase returns were made during the year. What was the amount of purchases (net of discount) made during the period? (Hint: When cash discounts are lost, cash decreases by more than accounts payable.)
C. Purchases of inventory (net of discount) were $800,000, while cash paid for inventory was $950,000 during the period. A purchase of $5,000 (net) was returned during the period. If the ending balance of accounts payable was $35,000, what was the beginning balance?
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