Question

QUESTION 2 (12 marks: 14 minutes)  
The selected data below were taken from the comparative trial balances of Airbus Ltd for the year ended 30 June X5:  
X5 X4 R R Trade receivable 720 000 800 000 Inventories 280 000 200 000 Property, plant and equipment 1 200 000 1 000 000 Accumulated depreciation 210 000 200 000 Stationery on hand 12 000 10 000 Trade payable (for inventory) 420 000 400 000 Other accrued liabilities ( for other operating expenses) 88 000 84 000 Retained income (profit) 210 000 150 000

Airbus Ltd Statement of Comprehensive Income for the year ended 31 December X5 R R Revenue Sales 920 000 Profit on disposal of property, plant and equipment 18 400 938 400 Expenses Cost of goods sold 690 000 Stationery expense 9 000 Other operating expenses (including depreciation of R10 000 and impairment expenses of R3 000) 174 000 873 000 Profit for the year 65 400

You are required to:  
Determine the following:  
1. Cash received from customers during the year.  

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2. Cash paid for stationery during the year. 3. Cash paid for inventory purchases during the year. 4. Cash paid for other operating expenses during the year.

Answer 1

Solution 1:

Computation of cash received from customers
Particulars	Amount
Beginning accounts receivables	$800,000.00
Add: Revenues	$920,000.00
Less: Ending accounts receivables	$720,000.00
Cash received from customers	$1,000,000.00

Solution 2:

Computation of cash paid for Stationery
Particulars	Amount
Stationery Expense	$9,000.00
Add: Ending Stationery	$12,000.00
Less: Beginning Stationery	$10,000.00
Cash paid for stationery purchased	$11,000.00

Solution 3:

Computation of cash paid for inventory purchase
Particulars	Amount
Cost of Goods Sold	$690,000.00
Add: Ending inventory	$280,000.00
Less: Beginning inventory	$200,000.00
Purchases made during the year	$770,000.00
Add: Opening accounts payable	$400,000.00
Less: Ending accounts payable	$420,000.00
Cash paid for inventory purchases	$750,000.00

Solution 4:

Computation of cash paid for Operating expenses
Particulars	Amount
Other Operating expenses	$174,000.00
Less: Depreciation Expense	$10,000.00
Less: Impairment Expense	$3,000.00
Add: Beginning accrued liabilities	$84,000.00
Less: ending accrued liabilities	$88,000.00
Cash paid for other operating expenses	$157,000.00