CH12Due4/19 Instructions I help Question 2 (of 2) Save& Exit Submt 5.00 points T
ID: 2519740 • Letter: C
Question
CH12Due4/19 Instructions I help Question 2 (of 2) Save& Exit Submt 5.00 points The independent cases are listed below that includes all items relevant to a operating activites: Sales revenue Cost of goods sold Depreciation expense Salaries and wages expense Net income Accounts receivable increase (decrease) Inventory increase (decrease) Accounts payable increase (decrease) Salaries and wages payable increase CaseA Case B Case C S 65,000 $ 55,000 $96,000 35,000 26,000 65,000 0,000 2,000 26,000 5,000 13,000 8,000 5,000 14,000 (3,000) (1,000) 4,000 3,000 0 (3,000) 2,000 2,500 (1,000) (decrease) ,500 2.000) 1,000 Compute cash flows from operating activities using the direct method. (Amounts to be deducted should be indicated with a minus sign.) Cash Collected from Customers Cash Payments to Suppliers Cash Payments for Salaries and Wages Net Cash Provided by Operating ActivitbesExplanation / Answer
Solution:
Case A
Case B
Case C
Cash Collected from Customers (Refer Note 1)
$66,000
$51,000
$99,000
Cash Payments to suppliers (Refer note 2 & 3)
$37,000
$23,500
$63,000
Cash payments for Salaries and Wages (Refer note 4)
$7,000
$11,500
$7,000
Net Cash Provided by Operating Activities
$110,000
$86,000
$169,000
Note 1 -- Cash Collected From Customers
Case A
Case B
Case C
Sales Revenue (Assumed Credit Sales) made during year
$65,000
$55,000
$96,000
Plus Accounts Receivable Decrease or (Less Accounts Receivable Increase)
$1,000
-$4,000
$3,000
Cash Collected from Customers
$66,000
$51,000
$99,000
Note 2 -- Cash payments to supplier
Case A
Case B
Case C
Plus: Purchases made during the year (refer note 3)
$37,000
$26,000
$62,000
Plus Accounts Payable Decrease or (Less Accounts Payable Increase)
$0
($2,500)
$1,000
Cash Paid to Supplier during the year
$37,000
$23,500
$63,000
Note 3 -- Purchase made during the year
Case A
Case B
Case C
Cost of Goods Sold
$35,000
$26,000
$65,000
Plus: Increase in Inventory (or less decrease in inventory)
$2,000
$0
-$3,000
Purchases made during the year
$37,000
$26,000
$62,000
Note 4 -- Cash Payments for Salaries and Wages
Case A
Case B
Case C
Salaries and Wages Expense incurred
$5,000
$13,000
$8,000
Plus Decrease in Salaries and Wages or (Plus Increase in Salaries and Wages)
$2,000
-$1,500
-$1,000
Cash Payments for Salaries and Wages
$7,000
$11,500
$7,000
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Case A
Case B
Case C
Cash Collected from Customers (Refer Note 1)
$66,000
$51,000
$99,000
Cash Payments to suppliers (Refer note 2 & 3)
$37,000
$23,500
$63,000
Cash payments for Salaries and Wages (Refer note 4)
$7,000
$11,500
$7,000
Net Cash Provided by Operating Activities
$110,000
$86,000
$169,000
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