Exercise 12-5B Direct: Computation of cash flows LO P5 Case X Compute cash recei

Question

Exercise 12-5B Direct: Computation of cash flows LO P5 Case X Compute cash received from customers Sales Accounts receivable, December 31, 2013 Accounts receivable, December 31, 2014 $ 450,000 57,000 78,660 Case Y: Compute cash paid for rent Rent expense Rent payable, December 31, 2013 Rent payable, December 31, 2014 $ 116,900 8,350 6,847 Case Z: Compute cash paid for merchandise Cost of goods sold Merchandise inventory, December 31, 2013 Accounts payable, December 31, 2013 Merchandise inventory, December 31, 2014 Accounts payable, December 31, 2014 $ 701,000 217.310 91,270 178,194 113,175 For each of the above three separate cases, use the information provided about the calendar-year 2014 operations of Sahim Company to compute the required cash flow information Case X Cash received from customers Case Y Cash paid for rent Case Z: Cash paid for merchandise

Explanation / Answer

the following is the required table with required workings:

note:

case X:

cash received from customers = opening accounts receivable + sales -closing accounts receivable

=>$450,000 + 57,000 - 78,660

=>$428,340.

case Y:

cash paid for rent = rent expense + opening rent payable - closing rent payable

=>$116,900 +8,350 - 6,847

=>$118,403.

caseZ:

first let us know purchases:

purchases = cost of goods sold + closing inventory - opening inventory

=>$701,000 + 178,194 - 217,310

=>$661,884.

now,

cash paid for merchandise = purchases + opening accounts payable - closing accounts payable

=> $661,884 + 91,270 - 113,175

=>$639,979.

Case X Cash received from customers $428,340 Case Y cash paid for rent $118,403 case Z cash paid for merchandise $639,979

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