Review questions _ solution
Acct 2301 F09 Prof. Li
Details about operating expenses:
Depreciation expense: $200,000
Accrued expenses: $550,000
Prepaid rent and insurance: $500,000
Compute Brice Corporation's cash collected from customers for the year ended
December 31, 2009.
$7,900,000 ($8,200,000 – $200,000 increase in accounts receivable – $100,000
decrease in unearned revenue) Unearned revenue increases for cash collected
from customers and decreases for sale recognition and decrease.
decrease of $100,000 in unearned revenue suggests cash collected in advance
from customers was $100,000 less than the sale revenues recognized from
realized unearned revenue.
Alternatively, if you want to apply the rules under indirect method,
Net Income +/- decrease (increase) in C.A. +/- increase (decrease) in C.L.
Sales 8,200,000 – 200,000 – 100,000 = 7,900,000 cash received from custormers
Compute Brice Corporation's cash paid to suppliers for inventory for the year
ended December 31, 2009.