Dec. 31 Dec. 31, For the 2010 2011 Year 2011 Merchandise inventory $5,600 $21,20

Question

Dec. 31 Dec. 31, For the
2010 2011 Year 2011
Merchandise inventory $5,600 $21,200
Accounts payable 32,400 27,400
Salaries payable 4, 400 3,000
Accounts receivable 42,000 36,000
Total assets 234,000 286,000
Sales $312,000
Cost of goods sold 165,600
Salaries expense 48,000
(1) Calculate the cash payments made during 2011 for merchandise. Assume all of the
company's accounts payable balances result from merchandise purchases.
(2) Calculate the cash receipts from customer sales during 2011.
(3) Calculate the cash payments for salaries during 2011

Explanation / Answer

1. cash payments for merchandise purchases = cost of goods sold + increase in inventory + decrease in AP = 165,600 + 15,600 + 5,000 = 186,200 answer: $186,200 2. cash payments from customers = sales + decrease in AR = 312,000 + 6,000 = 318,000 answr: $318,000 3. cash payments for salaries = salaries expense + decrease in salaries payable = 48,000 + 1,400 = 49,400 answr: $49,400

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