Calculate the cash collected from accounts receivable


Assignment:

The balance sheet and income statement for Bertha’s Bridal Boutique are presented along with some additional information about the accounts

• All accounts receivable and accounts payable are related to trade merchandise.  Accounts payable are recorded net and always are paid to take all the discounts allowed. The allowance for doubtful accounts at the end of 2011 was the same as at the end of 2010; no receivables were charged against the allowance during 2011.

• The proceeds from the note payable were used to finance a new warehouse; Capital stock was sold to provide additional working capital.

Answer the following questions concerning cash flows for the period.

Q1. Calculate the cash collected during 2011 from accounts receivable.

Q2. Calculate the cash payment during 2011 on accounts payable to suppliers.

Q3. Calculate the cash provided from operations for 2011

Q4. Calculate the cash inflows during 2010 from financing activities.

Q5. Calculate the cash outflows from investing activities during 2011.

                                                            Balance Sheet

                                                             December 31

                                                       2011                 2010

Assets

Current assets                                                                                                                                  

Cash                                             $ 450,000             $364,000           

Accounts receivable - net                   692,000               625,000

Inventory                                          723,000               610,000

Prepaid expenses                                50,000                 70,000

Total current assets                          1,915,000            1,669,000

Long-term investments                        150,000                 20,000

Property, plant, and equipment          1,622,000               815,000

Less:  Accumulated depreciation          (100,000)              (75,000)

                                                         1,522,000             740,000

Total assets                                       $3,587,000          $2,429,000

 

Liabilities and Stockholders' Equity                                                       

Current liabilities                                                                                           

Accounts payables                               $399,000               $451,000

Accrued expenses                                 185,000                  179,000

Dividends payable                                 50,000                   _________

Total current liabilities                             634,000                  630,000           

Notes payable - due 2014                        750,000                  ________

Stockholders' Equity

Common stock                                      1,400,000                1,300,000

Retained earnings                                    803,000                    499,000

Total stockholders' equity                        2,203,000                 1,799,000

Total liabilities and stockholders' equity    $3,587,000               $2,429,000

             

                                                                     Income Statement

                                                                   Years Ended December 31,

                                                                         2011                   2010

Net credit sales                                               $7,200,000            $6,500,000

Cost of goods sold                                             4,320,000              3,900,000

Gross profit                                                       2,880,000              2,600,000         

Operating expenses (including income taxes)       2,376,000               2,145,000

Net income                                                        $ 504,000              $ 455,000

Solution Preview :

Prepared by a verified Expert
Finance Basics: Calculate the cash collected from accounts receivable
Reference No:- TGS01831760

Now Priced at $25 (50% Discount)

Recommended (98%)

Rated (4.3/5)