Chapter 13, Problem 6F15

Ravenna Company is a merchandiser that uses the indirect method to prepare the operating activities section of its statement of cash flows. Its balance sheet for this year is as follows:

During the year, Ravenna paid a $6,000 cash dividend and it sold a piece of equipment for $3,000 that had accumulated depreciation cost $6,000 and had accumulated depreciation of $4,000. The company did not retire my bonds a repurchase any of its own common stock during the year.
Required:

6. (To help answer this question, create T-accounts for Inventory and Accounts Payable and insert their beginning and ending balances.) If the company debited Cost of Goods Sold and credited Inventor for $400,000 during the year, what is the total amount of inventory purchases recorded on the debit side of the Inventor T-account and the credit side of the Accounts Payable T-account’ What is the total amount of the debits recorded in the Accounts Payable T-account during the year What does the amount of these debits represent?