Calculate the following from each case: a) cash collected from customers b) cash

Question

  

Calculate the following from each case:

a) cash collected from customers

b) cash payments to suppliers

Case A Case B Case C   Sales revenue $ 63,000 $ 53,000 $ 97,000      Cost of goods sold 34,000 25,000 71,900      Depreciation expense 11,200 1,800 27,200      Salaries and wages expense 4,800 12,800 7,800      Net income 13,000 13,400 (9,900 )   Accounts receivable increase (decrease) (1,000 ) 3,800 2,800      Inventory increase (decrease) 1,800 0 (2,800 )   Accounts payable increase (decrease) 0 2,300 (1,000 )   Salaries and wages payable increase (decrease) 1,400 (1,800 ) 1,000

  

Explanation / Answer

Case A:

Cash collected from customers = Sales + decreses in account receivables

=$63,000 + $1,000

=$64,000

Cash Payment to Suppliers = Cost of goods sold + increase in inventory + decrease in accounts payable

=$34,000 + $1,800 + $0

=$35,800

Case B:

Cash collected from customers = Sales - iecreses in account receivables

=$53,000 - $3,800

=$49,200

Cash Payment to Suppliers = Cost of goods sold + increase in inventory - iecrease in accounts payable

=$25,000 + $0 - $2,300

=$22,700

Case C:

Cash collected from customers = Sales - iecreses in account receivables

=$97,000 - $2,800

=$94,200

Cash Payment to Suppliers = Cost of goods sold - decrease in inventory + decrease in accounts payable

=$71,900 - $2,800 + $1,000

=$70,100

=$35,800

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