The income statement of Price Ltd for the year ended 31 December 2020, reported the following condensed information: Revenue from fees $600,000 Operating expenses 360,000 Income from operations 240,000 Income tax expense 60,000 Net income $180,000 Price's balance sheet contained the following comparative data at December 31: 2020 2019 Accounts receivable $50,000 $45,000 Accounts payable 35,000 41,000 Income taxes payable 6,000 3,000 Price has no depreciable assets. Accounts payable pertains to operating expenses.

The income statement of Price Ltd for the year ended 31 December 2020, reported the following condensed information: Revenue from fees $600,000 Operating expenses 360,000 Income from operations 240,000 Income tax expense 60,000 Net income $180,000 Price's balance sheet contained the following comparative data at December 31: 2020 2019 Accounts receivable $50,000 $45,000 Accounts payable 35,000 41,000 Income taxes payable 6,000 3,000 Price has no depreciable assets. Accounts payable pertains to operating expenses.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Required:

a. Calculate:

Cash receipts from customers.
Cash payments for operating expenses.

b. Prepare the operating activities section of the statement of cash flows for 2020.

The income statement of Price Ltd for the year ended 31 December 2020, reported the following
condensed information:
Revenue from fees
$600,000
Operating expenses
360,000
Income from operations
240,000
Income tax expense
60,000
Net income
$180,000
Price's balance sheet contained the following comparative data at December 31:
2020
2019
Accounts receivable
$50,000
$45,000
Accounts payable
35,000
41,000
Income taxes payable 6,000
3,000
Price has no depreciable assets. Accounts payable pertains to operating expenses.

Definition Definition Net amount of cash that an entity receives and expends over the course of a given period. For a business to continue operating, positive cash flows are required, and they are also necessary to produce value for investors. Investors in particular prefer to see growing cash flows even after capital expenditures have been paid for (which is known as free cash flow).

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