The Following Information Is Available for Kent Company Year 2

question 40

Essay

The following information is available for Kent Company Year 2.
$$\begin{array} { l r } \text { Net income, Year 2 } & \$ 280,000 \\\text { Inventory, } 1 / 1 / \text { Year 2 } & 300,000 \\\text { Inventory, } 12 / 31 / \text { Year 2 } & 260,000 \\\text { Cost of goods sold, Year 2 } & 1,500,000 \\\text { Accounts payable, } 1 / 1 / \text { Year 2 } & 180,000 \\\text { Accounts payable, } 12 / 31 / \text { Year 2 } & 230,000\end{array}$$ Required:
1)What amount of cash was paid for the purchase of merchandise?
2)How will the above items be shown on the statement of cash flows using the indirect method?
3)How will the amount computed in 1)be shown on the statement of cash flows using the direct method?

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