Question

The following selected account balances appeared on the financial statements of the Washington Company:

Accounts Receivable, Jan. 1 $13,000
Accounts Receivable, Dec. 31 9,000
Accounts Payable, Jan 1 4,000
Accounts Payable Dec. 31 7,000
Merchandise Inventory, Jan 1 10,000
Merchandise Inventory, Dec. 31 15,000
Sales 56,000
Cost of Goods Sold 31,000
Question:
Cash Collections from customers are?
Cash paid to suppliers is?

Answer 1

Cash Collections from customers = $60,000

Cash paid to suppliers = $33,000

Step-by-step explanation:

Given:

Accounts Receivable, Jan 1 = $13,000

Accounts Receivable, Dec 31 = $9,000

Accounts Payable, Jan 1 = $4,000

Accounts Payable Dec. 31 = $7,000

Merchandise Inventory, Jan 1 = $10,000

Merchandise Inventory, Dec. 31 = $15,000

Sales = $56,000

Cost of Goods Sold = $31,000

Now,

Cash Collections from customers

= Accounts Receivable, Jan 1 + Sales - Accounts Receivable, Dec. 31

= $13,000 + $56,000 - $9,000

= $60,000

also,

Purchase

= Merchandise Inventory, Dec. 31 + Cost of Goods Sold - Merchandise Inventory, Jan 1

= $15,000 + $31,000 - $10,000

= $36,000

and,

Cash paid to suppliers

= Accounts Payable, Jan 1 + Purchase - Accounts Payable Dec. 31

= $4,000 + $36,000 - $7,000

= $33,000