The following information was reported by three companies. When completing the requirements, assume that any...
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The following information was reported by three companies. When completing the requirements, assume that any and all purchases on account are for inventory. Murgatroyd Manufacturing Oxendine Industries Lopez Incorporated Cost of goods sold $ 251,000 $ 188,000 $ 464,000 Inventory purchases from suppliers made using cash 295,000 0 238,000 Inventory purchases from suppliers made on account 0 219,000 295,000 Cash payments to suppliers on account 0 174,000 255,000 Beginning inventory 119,000 136,000 219,000 Ending inventory 163,000 167,000 288,000 Beginning accounts payable 0 170,000 99,000 Ending accounts payable 0 215,000 139,000 Required: What amount did each company deduct on the income statement related to inventory? What total amount did each company pay out in cash during the period related to inventory purchased with cash and on account? By what amount do your answers in requirements 1 and 2 differ for each company? By what amount did each companys inventory increase (decrease)? By what amount did each companys accounts payable increase (decrease)? Using the indirect method of presentation, what amount(s) must each company add (deduct) from net income to convert from accrual to cash basis?
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