Acompany's inventory balance at 12/31/16 was $188,000 and $200,000 at 12/31/15. its accounts payable balance at 12/31/16 was $84,000 and $80,000 at 12/31/15, and its cost of goods sold for 2016 was $720,000. the company's total amount of cash payments for merchandise in 2016 equals: a. $720,000. b. $728,000. c. $712,000. d. $704,000. e. $736,000.

d. $704,000

Explanation:

The computation of the cash payment for merchandise is shown below:

= Opening balance of accounts payable + purchase made - closing balance of accounts payable

where,

Purchase = Cost of goods sold + closing balance of inventory - opening balance of inventory

= $720,000 + $188,000 - $200,000

= $708,000

The other items values would remain the same

Now put these values to the above formula  

So, the value would equal to

= $80,000 + $708,000 - $84,000

= $704,000

b. Recovery paradox

Explanation:

Based on the scenario being described within the question it can be said that the florist is responding to the Service recovery paradox. This is a situation in which customers place companies on a higher pedestal after they solve a problem that the customer has had with their product or service. Which is what has happened in this scenario as the customers were extremely pleased with the company's service after they corrected the previous missed delivery.