Question

question: Summary Balance Sheets for Buckley Boat Repairs Ltd are given below:

	31 Dec 20x2	31 Dec 20x1
cash	138,240	92,160
Accounts receivable	36,864	55,296
Inventory	147,456	202,752
Plant & Equipment	110,592	82,944
Total assets	433,152	433,152
Accounts payable	64,512	27,648
Wages payable	73,729	119,808
Non-current liabilities	82,944	110,592
Share capital	92,160	92,160
Retained profits	119,808	82,944
Total liabilities and owners equity	433,152	433,152

The following information has been extracted from the company's income statement for the year ended 31 Dec 20x2.

Sales $1658,880

Cost of goods sold $ 875,520

Wages expenses $ 322,560

1. Calculate the cash received from customers during the year ended 31 Dec 20x2.

2. Calculate the cash payments to suppliers during the year ended 31 Dec 20x2.

3. How much cash was paid to employees for wages during the year ended 31 Dec 20x2?

4. What amount of net increase or decrease in cash and cash equivalents held during the year ended 31 Dec 20x2 would be reported in the company's cash flow statement?

Answer 1

1. Cash received from customers during the year ended 31 Dec 20X2 = Beginning accounts receivable + Sales - Ending accounts receivable = $ 55,296 + $ 1,658,880 - $ 36,864 = $ 1,677,312.

2. Cash payments to suppliers during the year ended 31 Dec 20X2 : $ 783,360.

Credit purchases of inventory during 20X2 = Ending inventory + Cost of goods sold - Beginning inventory = $ 147,456 + $ 875,520 - $ 202,752 = $ 820,224

Cash payments to suppliers = Beginning accounts payable + Purchases - Ending accounts payable = $ 27,648 + $ 820,224 - $ 64,512 = $ 783,360

3. Amount paid to employees for wages = Beginning wages payable + Wages expense - Ending wages payable = $ 119,808 + $ 322,560 - $ 73,729 = $ 368,639

4. Net increase in cash and cash equivalents during the year ended DEc 31, 20X2 = $ 138,240 - $ 92,160 = $ 46,080.