Exercise 21-2 (Algo) Determine cash paid to suppliers of merchandise [LO21-3, 21-6]

Shown below in T-account format are the beginning and ending balances ($ in millions) of both inventory and accounts payable.

Inventory
Beginning balance	70.0
Ending balance	71.0

Accounts Payable
		16.0	Beginning balance
		18.2	Ending balance

Required: 1. Use a T-account analysis to determine the amount of cash paid to suppliers of merchandise during the reporting period if cost of goods sold was $200 million.

Cash paid to suppliers

million

2. Prepare a summary entry that represents the net effect of merchandise purchases during the reporting period.

• Record the net effect of merchandise purchases during the reporting period.