Question

QUESTION 5 -

Answer each part independently.

1. The sales for an organisation within an accounting period were $340 000, opening accounts receivable was $40 000, and closing accounts receivable was $15 000. There were no doubtful debts expenses for the period. All sales are made on credit terms, meaning there were no cash sales. How much cash was actually received from customers within the accounting period? (2.5 marks)

Type answer here

2. Sunshine Beach Ltd started the accounting period with a liability for accrued wages of $50 000. Wages expense for the year was $780 000 and the closing balance of accrued wages was $65 000. How much cash was paid to employees? (2.5 marks)

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Answer 1

Answer- a)-The amount of cash was actually received from customers within the accounting period = $365000.

Explanation- Cash received from customers = Beginning balance of accounts receivable + Sales during the period - Ending balance of accounts receivable

= $40000+$340000-$15000

= $365000

Answer-a)- The amount of cash was paid to employees = $765000.

Explanation- Cash paid to employees = Opening accrued liability of wages + Wages expense for the year – Ending accrued liability of wages

= $50000+$780000 -$65000

= $765000