Suppose your company sells goods for $390, of which $245 is received in cash and
ID: 2581270 • Letter: S
Question
Suppose your company sells goods for $390, of which $245 is received in cash and $145 is on account. The goods cost your company $143 and were paid for in a previous period. Your company also recorded salaries and wages of $115, of which only $39 has been paid in cash
.
Prepare the journal entries to record these transactions. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)
1
Record the sales revenue of $245 for cash and $145 on account and record the cost of goods sold of $143 using one journal entry.
2
Record the salaries and wages expense of $115
Net income=
4.
+
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Prepare the journal entries to record these transactions. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)
1
Record the sales revenue of $245 for cash and $145 on account and record the cost of goods sold of $143 using one journal entry.
2
Record the salaries and wages expense of $115
. . Calculate the amount that should be reported as net cash flow from operating activities. 3. Calculate the amount that should be reported as net income.Net income=
4.
Show how the indirect method would convert net income (requirement 3) to net cash flow from operating activities (requirement 2). (Amounts to be deducted should be indicated with a minus sign.) Net Income Increase in Accounts Receivable Decrease in Inventory Increase in Salaries and Wages Payable Net Cash Flow from Operating Activities+
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Explanation / Answer
1. Journal entry :
2. Entry for salaries:
3.
Net income =sales -cost of good sold -salaries and wages
=$390-$143-$115
=$132
4. Cash flow from operating activities:
Cash $245 Account receivable $145 Cost of good sold $143 Sales revenue $390 Merchandise inventory $143Related Questions
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