Masthead Company's comparative balance sheetsincluded an inventory of $180,400 at December 31, 2009,and $241,200 at December 31, 2010. Masthead'scomparative balance sheets also included accountspayable of $85,400 at December 31, 2009, and $78,400 atDecember 31, 2010. Masthead's accounts payablebalances are composed solely of amounts due to suppliersfor purchases of inventory on account. Cost of goods sold,as reported by Masthead on its 2010 income statement,amounted to $1,200,000.What is the amount of cash payments for inventory thatMasthead will report in the Operating Activities category ofits 2010 statement of cash flows assuming that the directmethod is used?

We have given, Accounts payable at Dec. 31, 2009 = $85,400 Net purchases during 2010 = $1,260,800…

Answered: Masthead Company's comparative balance…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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