6. Selected financial statement information for Textile Co. appears below: Balan
ID: 2815278 • Letter: 6
Question
6. Selected financial statement information for Textile Co. appears below:
Balance Sheet accounts
Jan. 1, 2017
Dec. 31, 2017
Inventory
$210,000
$340,000
Accounts Receivable
$85,000
$43,000
Income Statement (partial)
For the year ended Dec. 31, 2017
Sales
$824,000
Cost of Goods Sold
($658,000)
Gross Profit
$166,000
(1). Calculate the amount of cash collected from customers.
(2). Calculate the amount of cash spent on inventory for 2017 by Textile Co.
Balance Sheet accounts
Jan. 1, 2017
Dec. 31, 2017
Inventory
$210,000
$340,000
Accounts Receivable
$85,000
$43,000
Explanation / Answer
(1).
Amount of cash collected from customers = $866000
Explanation;
Sales
$824000
+ Accounts receivable on Jan. 1, 2017
$85000
- Accounts receivable on Dec. 31, 2017
($43000)
Cash collected from customers
$866000
(2).
Amount of cash spent on inventory = $788000
Explanation;
Cost of goods sold
$658000
+ Inventory on Dec. 31, 2017
$340000
- Inventory on Jan. 1, 2017
($210000)
Cash spent on inventory
$788000
Sales
$824000
+ Accounts receivable on Jan. 1, 2017
$85000
- Accounts receivable on Dec. 31, 2017
($43000)
Cash collected from customers
$866000
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