Masthead Company's comparative balance sheets included an inventory of $180,400 at December 31, 2009, and $241,200 at December 31, 2010. Masthead's comparative balance sheets also included accounts payable of $85,400 at December 31, 2009, and $78,400 at December 31, 2010. Masthead's accounts payable balances are composed solely of amounts due to suppliers for 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 that Masthead will report in the Operating Activities category of its 2010 statement of cash flows assuming that the direct method is used?
Masthead Company's comparative balance sheets included an inventory of $180,400 at December 31, 2009, and $241,200 at December 31, 2010. Masthead's comparative balance sheets also included accounts payable of $85,400 at December 31, 2009, and $78,400 at December 31, 2010. Masthead's accounts payable balances are composed solely of amounts due to suppliers for 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 that Masthead will report in the Operating Activities category of its 2010 statement of cash flows assuming that the direct method is used?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
![Masthead Company's comparative balance sheets
included an inventory of $180,400 at December 31, 2009,
and $241,200 at December 31, 2010. Masthead's
comparative balance sheets also included accounts
payable of $85,400 at December 31, 2009, and $78,400 at
December 31, 2010. Masthead's accounts payable
balances are composed solely of amounts due to suppliers
for 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 that
Masthead will report in the Operating Activities category of
its 2010 statement of cash flows assuming that the direct
method is used?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F7e20e336-eb30-41df-9132-988b03678d9d%2Fb781c157-e6a0-4537-b1f2-79f1f7def64b%2Fjwwa3f_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Masthead Company's comparative balance sheets
included an inventory of $180,400 at December 31, 2009,
and $241,200 at December 31, 2010. Masthead's
comparative balance sheets also included accounts
payable of $85,400 at December 31, 2009, and $78,400 at
December 31, 2010. Masthead's accounts payable
balances are composed solely of amounts due to suppliers
for 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 that
Masthead will report in the Operating Activities category of
its 2010 statement of cash flows assuming that the direct
method is used?
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