Homework Soursequestion Summary Balance Sheets for Buckley Boat Repairs Ltd
question: Summary Balance Sheets for Buckley Boat Repairs Ltd are given below:
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?
| 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 |
Solution
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.
