Question

Selected balance sheet account balances are: VIZQUEL COMPANY

December 31

2002 2001

Cash $ 200,000 $ 300,000

Accounts Payable 60,000 80,000

Accounts Receivable 180,000 140,000

Salaries Payable 12,000 6,000

Land 120,000 140,000

Merchandise Inventory 100,000 160,000

Prepaid Rent 50,000 45,000

Unearned Consulting Revenue 70,000 50,000

Income statement items for the year are:

Sales $800,000

Consulting Fees $200,000

Cost of Goods Sold 400,000

Salary Expense 90,000

Depreciation Expense 40,000

Rent Expense 100,000

1. Cash collections from customers during 2002 amounted to:

2. Cash received from consulting services during 2002 was:

3. Total cash collected amounted to:

4. Cash payments to suppliers for merchandise inventory during 2002 amounted to:

5. Cash payments for salary during 2002 amounted to:

6. Cash payments for rent during 2002 amounted to:

7. Cash payments for depreciation during 2002 amounted to:

8. Total cash paid for operating activities amounted to:

9. Cash from operating activities during 2002 is:

10. Net income for Vizquel Company for 2002 is:

Answer 1

Solution:

1)	Cash collections from customers during 2002 amounted to:
	Sales	$800,000
	Plus: Beginning Accounts Receivable	$140,000
	Less: Ending Accounts Receivable	-$180,000
	Cash collection from customer during 2002	$760,000
2)	Cash received from consulting services during 2002 was:
	Consulting fees	$200,000
	Plus: Ending Unearned Consulting Revenue	$70,000
	Less: Beginning Unearned Consulting Revenue	-$50,000
	Cash received fom cunsulting services during 2002	$220,000
3)	total cash collected amounted to:
	Cash collection from customer during 2002	$760,000
	Cash received fom cunsulting services during 2002	$220,000
	Total Cash Collected	$980,000
4)	Cash payments to suppliers for merchandise inventory during 2002 amounted to:
	Beginning Accounts Payable	$80,000
	Plus: Purchases during 2002 (refer Note 1)	$340,000
	Less: Ending Accounts Payable	-$60,000
	Cash payments to suppliers for merchandise inventory during 2002	$360,000
	Note 1 --- Purchases during 2002
	Ending Inventory	$100,000
	Plus: Cost of Goods Sold	$400,000
	Less: Beginning Inventory	-$160,000
	Purchases during 2002	$340,000

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