Panoramic Inc had a beginning balance of 2400 in its Account

Panoramic Inc. had a beginning balance of $2,400 in its Accounts Receivable account. The ending balance of Accounts Receivable was $3,000. During the period, Panoramic recognized $48,000 of revenue on account. Panoramic’s Salaries Payable account has a beginning balance of $1,800 and an ending balance of $1,300. During the period, the company recognized $37,500 of accrued salaries expense.

Solution

Solution:

Part a –

Calculation of Net Income

Sales Revenue (given)

$48,000

Less: Accrued Salaries Expense

($37,500)

Net Income

$10,500

Part b --- Amount of Net Cash Flow from Operating Activities

$$

Cash Received from Customers

(beginning 2400 + Sales 48,000 - Ending 3000)

$47,400

Less: Cash paid for Salaries

(Beg 1800 + Accrued 37,500 - Ending 1300)

($38,000)

Net Cash Flow from Operating Activities

$9,400

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