AB Ltd. has MCC has prepared the Income statement including the following data (all sales are on account): Sales Cost of Goods Sold Gross Profit Expenses Net Profit $80,000 $50,000 $ 25,000 $ 10,000 $15,000 The comparative balance sheet shows the following data (by definition, accounts payable relates to merchandise purchases only): Beginning of Year End of Year Accounts Receivables (net) $7,000 Inventory Prepaid Expenses Accounts Payable $3,000 $2,000 $1,360 $5,720 $2,000 $1,000 $1,500 Required 1: What is the amount of Cash received from Customers? $ Required 2: What is the amount of Cash paid for merchandise purchase? $
AB Ltd. has MCC has prepared the Income statement including the following data (all sales are on account): Sales Cost of Goods Sold Gross Profit Expenses Net Profit $80,000 $50,000 $ 25,000 $ 10,000 $15,000 The comparative balance sheet shows the following data (by definition, accounts payable relates to merchandise purchases only): Beginning of Year End of Year Accounts Receivables (net) $7,000 Inventory Prepaid Expenses Accounts Payable $3,000 $2,000 $1,360 $5,720 $2,000 $1,000 $1,500 Required 1: What is the amount of Cash received from Customers? $ Required 2: What is the amount of Cash paid for merchandise purchase? $
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:AB Ltd. has MCC has prepared the Income statement including the following data (all sales
are on account):
Sales
Cost of Goods Sold
Gross Profit
Expenses
Net Profit
$80,000
$50,000
$ 25,000
$ 10,000
$15,000
The comparative balance sheet shows the following data (by definition, accounts payable
relates to merchandise purchases only):
End of Year
Beginning of Year
Accounts Receivables (net) $7,000
Inventory
Prepaid Expenses
Accounts Payable
$3,000
$2,000
$1,360
$5,720
$2,000
$1,000
$1,500
Required 1: What is the amount of Cash received from Customers? $
Required 2: What is the amount of Cash paid for merchandise purchase? $
Expert Solution
Step 1: Explaining cash flow statement
The cash flow statement is part of the financial statements of the company. It is prepared at the end of the accounting period by the management. It indicates cash inflow and cash outflow transactions of the year and can be prepared by using direct and indirect methods.
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