parts 3,4,5 E12-14 Calculating and Understanding Operating Cash Flows Relating toInventory Purchases (Indirect Method) [LO 12-2]The following information was reported by three companies. When completing the requirements,assume that any and all purchases on account are for inventory.AztecBikesCorporation$223CampusCycles$422UnlimitedCost of goods soldInventory purchases from suppliers made using cashInventory purchases from suppliers made on accountCash payments to suppliers on accountBeginning inventoryEnding inventoryBeginning accounts payableEnding accounts payable$21126022421226015722011212121214914927412592180132Required:1. What amount did each company deduct on the income statement related to inventory?2. What total amount did each company pay out in cash during the period related to inventorypurchased with cash and on account?3. By what amount do your answers in requirements 1 and 2 differ for each company?4. By what amount did each company's inventory increase (decrease)? By what amount did eachcompany's accounts payable increase (decrease)?5. Using the indirect method of presentation, what amount(s) must each company add (deduct) from netincome to convert from accrual to cash basis?

working note: 1. $224 + $220 =$444

The following information was reported by three companies. When completing the requirements, assume that any and all purchases on account are for inventory. Aztec Corporation $223 Bikes Unlimited $211 Campus Cycles $422 Cost of goods sold Inventory purchases from suppliers made using cash Inventory purchases from suppliers made on account Cash payments to suppliers on account Beginning inventory Ending inventory Beginning accounts payable Ending accounts payable 260 224 212 260 157 220 112 149 121 212 149 274 125 92 180 132 Required: 1. What amount did each company deduct on the income statement related to inventory? 2. What total amount did each company pay out in cash during the period related to inventory purchased with cash and on account? 3. By what amount do your answers in requirements 1 and 2 differ for each company? 4. By what amount did each company's inventory increase (decrease)? By what amount did each company's accounts payable increase (decrease)? 5. Using the indirect method of presentation, what amount(s) must each company add (deduct) from net income to convert from accrual to cash basis?

The following information was reported by three companies. When completing the requirements, assume that any and all purchases on account are for inventory. Aztec Corporation $223 Bikes Unlimited $211 Campus Cycles $422 Cost of goods sold Inventory purchases from suppliers made using cash Inventory purchases from suppliers made on account Cash payments to suppliers on account Beginning inventory Ending inventory Beginning accounts payable Ending accounts payable 260 224 212 260 157 220 112 149 121 212 149 274 125 92 180 132 Required: 1. What amount did each company deduct on the income statement related to inventory? 2. What total amount did each company pay out in cash during the period related to inventory purchased with cash and on account? 3. By what amount do your answers in requirements 1 and 2 differ for each company? 4. By what amount did each company's inventory increase (decrease)? By what amount did each company's accounts payable increase (decrease)? 5. Using the indirect method of presentation, what amount(s) must each company add (deduct) from net income to convert from accrual to cash basis?

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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