Panoramic Inc. had a beginning balance of $2,400 in its Accounts Receivable acco
ID: 2398675 • Letter: P
Question
Panoramic Inc. had a beginning balance of $2,400 in its Accounts Receivable account. The ending balance of Accounts Receivable was $3,000. During the period, Panoramic recognized $48,000 of revenue on account. Panoramic’s Salaries Payable account has a beginning balance of $1,800 and an ending balance of $1,300. During the period, the company recognized $37,500 of accrued salaries expense.
Panoramic Inc. had a beginning balance of $2,400 in its Accounts Receivable account. The ending balance of Accounts Receivable was $3,000. During the period, Panoramic recognized $48,000 of revenue on account. Panoramic’s Salaries Payable account has a beginning balance of $1,800 and an ending balance of $1,300. During the period, the company recognized $37,500 of accrued salaries expense.
Explanation / Answer
Solution:
Part a –
Calculation of Net Income
Sales Revenue (given)
$48,000
Less: Accrued Salaries Expense
($37,500)
Net Income
$10,500
Part b --- Amount of Net Cash Flow from Operating Activities
$$
Cash Received from Customers
(beginning 2400 + Sales 48,000 - Ending 3000)
$47,400
Less: Cash paid for Salaries
(Beg 1800 + Accrued 37,500 - Ending 1300)
($38,000)
Net Cash Flow from Operating Activities
$9,400
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Calculation of Net Income
Sales Revenue (given)
$48,000
Less: Accrued Salaries Expense
($37,500)
Net Income
$10,500
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