Question

IMT Co. reported the following selected information for 2010:

Sales revenue ..........................................................................................    $865,000

Cost of goods sold..................................................................................      360,000

Depreciation expense .............................................................................        43,000

Salaries & wages expense ……………………………………………...     178,000

Rent Expense …………………………………………………………..       95,000

                                                                                          Beginning of Year        End of Year

Accounts receivable .....................................                $ 15,000                 $ 35,000

Prepaid rent ...................................................                   21,000                    15,000

Salaries & wages payable .............................                   33,000                    18,000

Required:Use the above information to calculate:

The cash collected from customers

ii)The cash paid for depreciation

iii)The cash paid to employees

iv)The cash paid for rent

Answer 1

• All working forms part of the answer
• Requirement #1 Cash Collected from Customer

#1
Accounts receivables - Beginning	$          15,000
Net Sales	$        865,000
Accounts receivables - Ending	$        (35,000)
Cash receipts from customers	$        845,000 = ANSWER

• Requirement #2

Depreciation Expense is a NON – CASH item and NO ACTUAL CASH IS PAID for Depreciation.

Answer = $ 0

• Requirement #3

#3
Salaries & Wages payable - Beginning	$      33,000
Salary & Wages Expense	$   178,000
Salaries & Wages payable - Ending	$   (18,000)
Cash paid to Employees	$   193,000 = ANSWER

• Requirement #4

#4
Prepaid Rent – Ending balance	$      15,000
Rent Expense	$      95,000
Prepaid Rent - Beginning balance	$   (21,000)
Cash paid for Rent	$      89,000 = ANSWER