Do I include my Accounts Payable balance for materials purchased in my cost of goods sold calculation?

Question

Beginning Inventory of 20K

Purchases of 80K (Paid for 60K but have 20K still payable)

Direct Labor 40K

Ending Inventory 36K

Should my COGS be 104K?

Answer 1

The formula of COGS is Op. Stock + Net Purchases + Direct Expenses - Closing Stock

Net Purchases  = Cash Purchases + Credit Purchases - Purchases Returns

So According to the formula we will definitely include the amount of Accounts Payable while calculating COGS. So It would be  20+ 80+40-36 = 94 K

Answer 2

It's Ok

COGS:

+Beginning Inventory 20

+Purchases 80

+Direct Labor 40

- Ending Inventory   36

= 104

Accounts Payable is not used when calculating the Cost of Goods sold.