Selected financial information for Zeno Corp. for the year ended December 31, Year 1:<br/>- Cost of Goods Sold: $800,000<br/>- Inventory balance increase: $50,000<br/>- Accounts Payable balance decrease: $20,000<br/><br/>Using the direct method, what amount of cash was paid to suppliers for inventory in Year 1?

Step 1: Determine Purchases. <br/>Inventory increased by $50,000, meaning Zeno bought $50,000 more than it sold. <br/>Purchases = COGS ($800,000) + Increase in Inventory ($50,000) = $850,000.<br/><br/>Step 2: Determine Cash Paid.<br/>Accounts Payable decreased by $20,000, meaning Zeno paid for all current purchases plus an additional $20,000 of prior liabilities.<br/>Cash Paid = Purchases ($850,000) + Decrease in AP ($20,000) = $870,000.