Explanation

To calculate cash paid to suppliers, we need to understand the relationship between purchases, inventory changes, and cash payments:

Formula: Cash paid to suppliers = Purchases from suppliers - Increase in accounts payable + Decrease in accounts payable

However, in this question, we only have:

• Purchases from suppliers: $9,000
• Increase in inventory: $1,000

Step-by-step calculation:

1. Cost of Goods Sold (COGS) relationship: COGS = Beginning Inventory + Purchases - Ending Inventory

2. Inventory change relationship: Increase in inventory = Ending Inventory - Beginning Inventory = $1,000

3. Alternative approach: When inventory increases by $1,000, it means the company purchased $1,000 more inventory than it sold. Therefore: Cash paid to suppliers = Purchases - Increase in inventory = $9,000 - $1,000 = $8,000

Why this works:

• If inventory increases by $1,000, the company has $1,000 worth of inventory that hasn't been sold yet
• This $1,000 of inventory was purchased but hasn't been expensed as COGS
• Therefore, the cash outflow for purchases that actually affected cash flow is $9,000 - $1,000 = $8,000

Answer: $8,000 (Option B)