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STATEMENT OF CASH FLOWS:  REPORTING THE EFFECTS OF OPERATING, INVESTING, AND FINANCING ACTIVITIES ON CASH FLOWS   T4-X

4.35(Digit Retail Enterprises, Inc.; inferring cash flows from balance sheet and income statement data.)

a.Sales Revenue$270,000

Less Increase in Accounts Receivable ($38,000 –

$23,000)(15,000)

Less Decrease in Advances from Customers ($6,100 –

$8,500)(2,400)

Cash Received from Customers during the Year$252,600

b.Cost of Goods Sold$(145,000)

Less Increase in Merchandise Inventory ($65,000 –

$48,000)(17,000)

Acquisition Cost of Merchandise Purchased during the

Year$(162,000)

c.Acquisition Cost of Merchandise Purchased during the

Year (from Part b.)$(162,000)

Plus Increase in Accounts Payable—Merchandise Sup-

pliers ($20,000 – $18,000)2,000

Cash Paid for Acquisitions of Merchandise during the

Year$(160,000)

d.Salaries Expense$(68,000)

Plus Increase in Salaries Payable ($2,800 – $2,100)700

Cash Paid to Salaried Employees during the Year$(67,300)

e.Insurance Expense$(5,000)

Less Increase in Prepaid Insurance ($12,000 – $9,000)(3,000)

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