The two independent cases are listed below: Case A Case B Compute the net cash f
ID: 2455246 • Letter: T
Question
The two independent cases are listed below:
Case A
Case B
Compute the net cash flow from operating activities section of the Year 2 statement of cash flows using the direct method and find the following for both cases A and B:
a) cash collected from customers
b) cash payments to suppliers
c) cash payments for salaries and wages
Case A
Case B
Year 2 Year 1 Year 2 Year 1 Sales Revenue $ 12,400 $ 10,400 $ 28,000 $ 19,400 Cost of Goods Sold 6,700 6,200 14,800 11,700 Gross Profit 5,700 4,200 13,200 7,700 Depreciation Expense 1,140 1,140 1,640 1,640 Salaries and Wages Expense 3,200 2,140 6,400 5,140 Net Income 1,360 920 5,160 920 Accounts Receivable 370 470 820 670 Inventory 820 570 870 870 Accounts Payable 940 840 870 990 Salaries and Wages Payable 2,400 1,340 270 320Explanation / Answer
Answer:a) cash collected from customers:
Cash Collections Receipts from Sales = Sales + Decrease (or - increase) in Accounts Receivable
Case A =$12400+100=$12500
Case B=$28000-150=$27850
Answer:b) cash payments to suppliers:
Cash payments for purchases = cost of goods sold + increase (or - decrease) in inventory + decrease (or - increase) in accounts payable
Case A=$6700+$250-$100=$6850
Case B=$14800-0+120=14920
Answer:c) cash payments for salaries and wages:
Cash payments forSalaries and wages = Salary and wage expenses + decrease (or - increase) in salaries and wages payable
Case A =$3200-1060=2140
Case B= 6400+50=6450
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