Cash flows during the first year of operations for the Hanman Karoon Consulting

Question

Cash flows during the first year of operations for the Hanman Karoon Consulting Company were as follows Cash collected from customers. $305,000. Cash paid for rent $33,000. Cash paid to employees for services rendered during the year, $113,000. Cash paid for utilities, $43,000. In addition, you determine that customers owed the company $53,000 at the end of the year and no bad debts were anticipated. Also the company owed the gas and electric company $1,300 at year-end, and the rent payment was for a two-year period. Calculate actual net income for the year.

Explanation / Answer

Particulars Amount Cash collected from customers 305000 Customers owed the company 53000 Less: Expenses Cash paid for rent 33000 Cash paid to employees 113000 Cash paid for utilities 43000 Gas and electric company 1300 Net Income 167700

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