Question

Bimbo experienced the following transactions during Year 2:

Purchased $16,000 of inventory on account. Terms were 2/10, net 30.

The inventory purchased above was delivered FOB Shipping Point. Freight costs totaled $600.

Returned $500 of the inventory purchased above.

Recorded the cash discount on the goods purchased above and paid the balance due in Accounts Payable within the discount period.

Recognized $21,000 of cash revenue from the sale of inventory and recognized $15,000 of costs of goods sold.

The inventory that was sold was shipped FOB, Destination. Freight costs totaled $950.

Paid $4,000 of selling and administrative expenses in cash.

Sold the land for $5,600.

QUESTION 1-  The ending balance in the Cash account totaled _________

Answer 1

The ending balance in cash account totaled $5,860

WORKING NOTE

cash flow statement

cash from operating

revenue from sale of inventory $21,000

cash paid to creditors    ($15,190)

total of cash paid to freight ($1,550 )

selling and adminstartive ($4,000)

cash flows from operating activity $ 260

Cash from investing activity

sold the land $5,600

  

total cash in hand at year end    $5,860

cash paid to creditors calculation

total purchased $16,000 less returns $500

paid with in time of 10 days so we recived discount of 2% on 15500

total cash paid =$15500-2%= $15190