Question

The following information is taken from the 2022 general ledger of Sunland Company.

Rent Rent expense $ 51,000
Prepaid rent, January 1 10,030
Prepaid rent, December 31 12,580
Salaries Salaries and wages expense $ 91,800
Salaries and wages payable, January 1 3,400
Salaries and wages payable, December 31 13,600
Sales Sales revenue $272,000
Accounts receivable, January 1 27,200
Accounts receivable, December 31 11,900
In each case, compute the amount that should be reported in the operating activities section of the statement of cash flows under the direct method.
Cash payments for rent
Cash payments for salaries
Cash receipts from customers

Answer 1

Prepaid Rent - Dec 31 $12,580

Rent Expenses $51,000

Less: Prepaid rent Jan 1 $10,030

Cash payment for Rent $53,550

Salaries & Wages payable - Dec 31 $13,600

Salaries & Wage expense $91,800

Less: Salaries & wages payable Jan 1 $13,400

Cash payment for Salaries $92,000

Accounts receivables - Jan 1 $27,200

Sales revenue $272,000

Less: Accounts receivables, Dec 31 $11,900

Cash receipts from customer $287,300