CASH FLOW QUESTION sHow woRK S Points Each ompany reports a 560,000 increase in

Question

CASH FLOW QUESTION sHow woRK S Points Each ompany reports a 560,000 increase in inventory and a $20,000 in accounts payable during the year. Cost of Goods Sold for increase he year was $600,000. The cash payments made to suppliers were: sc 600,000 + 60,000-7,000= 6uo.ooo The accounts receivable balance increased $40,000 during the year. How much cash did Warren receive from its customers during the year? The beginning balance of Unearned Rent was $16,200 and the ending 2. Warren, Inc. had cash sales of $1,000,000 and credit sales of $2,000,000. balance was $22,400. The Rent Earned for the year was $117,400. How much cash was received for rent? 4. If wages expense is $360,000 and the beginning and ending Wages Payable balances are $40.000 and $60,000, respectively, cash paid to employees for wages is: 5. The beginning balance of Prepaid Interest was $7,200 and the ending balance was S10,400. The Interest Expense account for the year was S34,400. How much cash was paid for interest? EXTRA CREDIT - What was the most important accounting concept and explain the WHY n d

Explanation / Answer

4)

Cash paid to employees

= Opening payables + Expenses for the period – Closing payables

= $40,000 + $360,000 - $60,000

= $340,000

5)

Cash paid for interest

= Closing prepaid interest + Expenses for the year – Opening prepaid interest

= $10,400 + $34,400 - $7,200

= $37,600

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