Question

Corporation made sales of million during . Of this​ amount, collected cash for million. The​ company's cost of goods sold was ​million, and all other expenses for the year totaled million. Also during ​, paid million for its inventory and million for everything else. Beginning cash was million.

Carter's top management is interviewing you for a job and they ask two questions:

Required:
a. How much was Carter's net income for 2016?
b. How much was Carter's cash balance at the end of 2016?

Answer 1

A. $405 million

B. $332 million

Step-by-step explanation:

A. Calculation for How much was Carter's net income for 2016

Using this formula

2016 Net income=Sales revenue - Cost of goods sold - Other expenses

Let plug in the formula

2016 Net income= $900 million - $270 million - $225 million

2016 Net income = $405 million

Therefore How much was Carter's net income for 2016 is $405 million

B. Calculation for How much was Carter's cash balance at the end of 2016

Using this formula

2016 Ending cash balance =Beginning balance + Cash receipts - Payments

Let plug in the formula

2016 Ending cash balance=$ 110 millon + $872 million- $375million - $275million

2016 Ending cash balance= $332million

How much was Carter's cash balance at the end of 2016 is $332million