Credit purchases from trade payables movement

Steps:

• All purchases are on credit (no cash purchases).
• Calculate credit purchases: payments to trade payables + (closing trade payables - opening trade payables) = 110,800 + (27,400 - 22,500).
• This equals $115,500 (gross purchases).
• Since opening and closing inventory are the same, cost of sales = credit purchases (returns outwards is a distractor as balances reflect net liability).

Why C is correct:

• Credit purchases formula (payments + closing payables - opening payables) gives net amount bought for resale; unchanged inventory means cost of sales equals this (accounting standard for trading account).

Why the others are wrong:

• A subtracts the payables increase from payments (common error reversing the formula).
• B adds returns outwards unnecessarily to option A.
• D is roughly the payables increase (ignores payments).

Final answer: C