Question

10. A company reported annual sales revenue of $1,800,000. During the year, accounts receivable decreased from a $56,000 beginning balance to a $48,000 ending balance. Accounts payable decreased from a $44,000 beginning balance to a $32,000 ending balance.

How much is cash received from customers for this year?

11. A company reported annual sales revenue of $2,580,000. During the year accounts receivable increased from a $56,000 beginning balance to a $76,000 ending balance. Accounts payable decreased from a $52,000 beginning balance to a $24,000 ending balance.

     How much is cash received from customers for the year?

12. A company reported cost of goods sold of $1,760,000 for the year. During the year, inventory increased from a $92,000 beginning balance to a $140,000 ending balance, and accounts payable increased from a $48,000 beginning balance to a $56,000 ending balance.

How much is the cash paid for merchandise purchased during the year?

13. A company reported annual income tax expense of $328000. during the year, income tax payable increased from a 248000$ beginning balance to a $35200 ending balance. How much is the cash paid for income taxes during the year?

Answer 1

Question 10

Answer ---$1808000

Calculation

Sales Revenue	$ 1,800,000.00
Add: Decrease in Accounts Receivable	$          8,000.00*
Cash received from Customers	$ 1,808,000.00

*$56000-48000

When balance of Accounts receivable decreases, it means accounts receivable has paid their dues and most importantly cash received from accounts receivable is more than accounts receivables debited during the year . Changes in balances of Accounts payable have nothing to do with this.

Question 11

Answer----- $2,560,000

Calculations

Sales Revenue	$ 2,580,000.00
Less: Increase in Accounts Receivable	$      (20,000.00)*
Cash received from Customers	$ 2,560,000.00

*$56000-76000

When balance of Accounts receivable increases, it means cash received from accounts receivable is less than accounts receivables debited during the year. Changes in balances of Accounts payable have nothing to do with this.

Question 12

Answer----1,800,000

Calculations

Cost of Goods Sold	$ 1,760,000.00
Add: Increase in Inventory	$        48,000.00*
Total Purchases	$ 1,808,000.00
Less: Increase in Accounts Payable	$        (8,000.00)**
Cash paid to Accounts payable	$ 1,800,000.00

*$140000-92000

**$56000-48000

Increase in Inventory is added to Cost of goods sold because it indicates that purchase is more than Cost of goods sold. Increase in Accounts payable indicates that cash paid to Accounts payable is less than purchases during the year.

Question 13

Answer------$ 317,600

Calculations

Income tax expense	$      328,000.00
Increase in Income tax payable Account	$        10,400.00*
Income tax paid in cash	$      317,600.00

*$35200-$24800

Increase in income tax payable account means that some of the portion of income tax is not paid or in other words income tax paid in cash is less than income tax expense during the year.

There seems to be a little mistyping in the question. Answer is solved assuming Beginning balance to be $24800.