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. Aztec Corporation Bikes Unlimited Campus Cycles Cost of goods sold $ 175,000 $ 175,000 $ 350,000 Inventory purchases from suppliers made using cash 200,000 0 200,000 Inventory purchases from suppliers made on account 0 200,000 200,000 Cash payments to suppliers on account 0 160,000 160,000 Beginning inventory 100,000 100,000 200,000 Ending inventory 125,000 125,000 250,000 Beginning accounts payable 0 80,000 80,000 Ending accounts payable 0 120,000 120,000 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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