4 Cash flows: 5 Cash collected from clients 6 7 8 9 Utilities 10 Payment of rent 11 Balance Sheet information 12 Accounts receivable - End of year 13 Accounts payable - End of year 14 Payables-Advertising Payables-Utilities 15 16 17 18 19 20 21 22 23 Cash disbursements: Salaries paid to employees for services rendered during the year Advertising A Accounts payable total Additional information: There were no anticipated bad debts on receivables. The rent payment was for a two-year period, year 2 and year 3. Required: 4 1. Calculate the net operating cash flow for years 2 and 3. 2. Prepare an income statement for each year according to the accrual B Year 1 $20,000 3,000 800 $3,800 Year 2 Year 2 $260,000 180,000 15,000 8,000 80,000 Year 2 $35,000 4,000 1,200 $5,200 Year 3 D Year 3 $400,000 210,000 22,000 6,000 0 Year 3 $18,000 2 years 2,000 0 $2,000 E
4 Cash flows: 5 Cash collected from clients 6 7 8 9 Utilities 10 Payment of rent 11 Balance Sheet information 12 Accounts receivable - End of year 13 Accounts payable - End of year 14 Payables-Advertising Payables-Utilities 15 16 17 18 19 20 21 22 23 Cash disbursements: Salaries paid to employees for services rendered during the year Advertising A Accounts payable total Additional information: There were no anticipated bad debts on receivables. The rent payment was for a two-year period, year 2 and year 3. Required: 4 1. Calculate the net operating cash flow for years 2 and 3. 2. Prepare an income statement for each year according to the accrual B Year 1 $20,000 3,000 800 $3,800 Year 2 Year 2 $260,000 180,000 15,000 8,000 80,000 Year 2 $35,000 4,000 1,200 $5,200 Year 3 D Year 3 $400,000 210,000 22,000 6,000 0 Year 3 $18,000 2 years 2,000 0 $2,000 E
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question

Transcribed Image Text:4567899
Cash flows:
Cash collected from clients
6 Cash disbursements:
15
16
10
11 Balance Sheet information
12 Accounts receivable - End of year
13 Accounts payable - End of year
14
Payables-Advertising
Payables - Utilities
Salaries paid to employees for services rendered during the year
Advertising
Utilities
Payment of rent
Accounts payable total
A
17
18 Additional information:
19
20
21
22 Required:
23
There were no anticipated bad debts on receivables.
The rent payment was for a two-year period, year 2 and year 3.
B
Year 1
$20,000
3,000
800
$3,800
24 1. Calculate the net operating cash flow for years 2 and 3.
25 2. Prepare an income statement for each year according to the accrual accounting medit
Year 2
Year 2
$260,000
180,000
15,000
8,000
80,000
Year 2
$35,000
4,000
1,200
$5,200
D
Year 3
$400,000
Year 3
78724
210,000
22,000
6,000
0
Year 3
2 years
$18,000
2,000
0
$2,000
E
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