Question Content Area Effects of Transactions Involving Inventories on the Statement of Cash FlowsDirect Method Shippenton Inc.'s comparative balance sheets included inventory of $185,600 at December 31, 2015, and $241,200 at December 31, 2016. Shippenton's comparative balance sheets also included accounts payable of $85,400 at December 31, 2015, and $78,400 at December 31, 2016. Shippenton's accounts payable balances are composed solely of amounts due to suppliers for purchases of inventory on account. Cost of goods sold, as reported by Shippenton on its 2016 income statement, amounted to $1,200,000. Required: What is the amount of cash payments for inventory that Shippenton will report in the Operating Activities category of its 2016 statement of cash flows assuming that the direct method is used?.

1. Question Content Area
Effects of Transactions Involving Inventories on the Statement of Cash FlowsDirect Method
Shippenton Inc.'s comparative balance sheets included inventory of $185,600 at December 31,
2015, and $241,200 at December 31, 2016. Shippenton's comparative balance sheets also
included accounts payable of $85,400 at December 31, 2015, and $78,400 at December 31, 2016.
Shippenton's accounts payable balances are composed solely of amounts due to suppliers for
purchases of inventory on account. Cost of goods sold, as reported by Shippenton on its 2016
income statement, amounted to $1,200,000.
Required:
What is the amount of cash payments for inventory that Shippenton will report in the Operating
Activities category of its 2016 statement of cash flows assuming that the direct method is used?