Refer to the facts in Problem 6-29.

Data from 6-29.

Assume that GFF uses a perpetual inventory system and the weighted-average cost flow assumption to account for its inventory. All purchases were made on account; all sales were for cash. GFF€™s supplier offered terms of 2/10, net 30. GFF recorded purchases at the gross amount. Additional information follows:

Purchase discount taken

Purchase #1 ..................................................... Yes
Purchase #2 ...................................................... No
Purchase #3 ...................................................... No

Sales price per unit

Sale #1 ....................................................... $24.00
Sale #2 ........................................................  26.00
Sale #3 ........................................................  25.50

Required:
a. Prepare journal entries to record:

i. The purchases of the inventory

ii. The sales of the inventory

iii. Payment of the accounts payables

b. Assume that GFF€™s opening and closing balances of its accounts receivable and payable for the year were $0. If the company uses the direct method to prepare its statement of cash flows, how much would be reported as a cash inflow from the sale of inventory? As a cash outflow from the purchase of inventory?

Unit cost Units Opening inventory $16.00 10,000 Purchase #1 5,000 17.50 Sale #1 (500) Purchase #2 4,000 17.25 Sale #2 (11,000) Purchase #3 6,000 16.75 Sale #3 (13,000) Total 500