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. Determine cash receipts and/or payments involved with the data presented (I have supplied you the answer to part a in order to help you understand what I am asking):

                                                 Income Statement                         Balance Sheet

                                                       For year                            Beg year            End year

a. Sales revenue (on credit)         $250,000                    

        Accounts Receivable (net)                                               $30,000               $35,000

Cash receipts related to sales were $245,000. I figured this out by making a t-account of accounts receivable and solving for the cash collected. Note that by indicating that Accounts Receivable is net, you don’t need to worry about bad debts or the allowance for doubtful accounts in this setting.

Accounts Receivable (net)

Beginning Balance                     $30,000

Sales on account                      $250,000

$245,000 must be the cash collected

Ending Balance                         $35,000

                                                 Income Statement                         Balance Sheet

                                                       For year                            Beg year            End year

b. Income taxes expense              $ 42,000                              

       Income taxes Payable                                                   $18,000                       $17,000

    Income Statement                         Balance Sheet

                                                       For year                            Beg year            End year

c.   Cost of goods sold                   $109,000            

        Inventory                                                                         $34,000           $36,000

        Accounts Payable                                                           $18,000             21,000

Accounts Receivable (net)

Beginning Balance                     $30,000

Sales on account                      $250,000

$245,000 must be the cash collected

Ending Balance                         $35,000

 

   

 

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Accounting 2 Months Ago 110 Views
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