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homework solution - E4-5.Determining collections on...

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Unformatted text preview: E4-5.Determining collections on account(AICPA adapted)Cash receipts from sales include cash sales plus collections on account computed as follows:Cash sales$ 200,000Beginning accounts receivable400,000Credit sales3,000,000Less: Ending accounts receivable(485,000)Total Cash receipts from sales$3,115,000Alternative Solution: T-account analysis of accounts receivableAccounts ReceivableBeginning balance$ 400,000XCollections on accountSales on account3,000,000Ending balance $ 485,000$485,000 = $400,000 + $3,000,000 -XX = $2,915,000Total cash receipts from sales:Cash sales$ 200,000Collections on accounts receivable2,915,000Total cash collected on sales$3,115,000E4-6.Determining cash from operations(AICPA adapted)Cash flows from operations:Cash received from customers$870,000Rent received10,000Taxes paid(110,000)Cash paid to employees and suppliers(510,000)Cash flows from operations$260,000Notice that cash dividends paid arises from the issuance of stock, a financing activity, and thus is not included in cash flows from operations.E4-7.Determining cash payments to suppliersCost of goods sold$ 318,450Add: Increase in inventory6,200Less: Increase in accounts payable(6,800)Cash paid to suppliers$ 317,850E4-8.Determining cash disbursements(AICPA adapted)To answer this question, one needs to first determine the accrual basis expenses and then (1) subtract from this figure expenses not paid in cash; and (2) add amounts paid out in cash not recorded as accrual expenses....
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homework solution - E4-5.Determining collections on...

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