Chapter 16, Problem E16A.29E

Computing cash flow items—direct method
Learning Objective 4 Appendix 16A

1. Cash Receipts from Oust. $72,000

Consider the following facts:

1. Beginning and ending Accounts Receivable are $24,000 and $20,000, respectively. Credit sales for the period total $68,000.
2. Cost of goods sold is $77,000.
3. Beginning Merchandise Inventory balance is $29,000, and ending Merchandise Inventory balance is $26,000.
4. Beginning and ending Accounts Payable are $12,000 and $16,000, respectively.

Requirements

1. Compute cash collections from customers.
2. Compute cash payments for merchandise inventory.