Question

The following information is taken from the 2020 general ledger of Swisher Company. Rent Rent expense $48,000 Prepaid rent, January 1 5,900 Prepaid rent, December 31 9,000 Salaries Salaries and wages expense $54,000 Salaries and wages payable, January 1 10,000 Salaries and wages payable, December 31 8,000 Sales Sales revenue $175,000 Accounts receivable, January 1 16,000 Accounts receivable, December 31 7,000 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

See below

Step-by-step explanation:

1. Cash payments

= Rent expense + Prepaid rent, December 31 - Prepaid rent January 1

= $48,000 + $9,000 - $5,900

= $51,100

2. Cash payments for salaries

= Salaries and wages expense + salaries and wages payable January 1, - salaries and wages payable December 31

= $54,000 + $10,000 - $8,000

= $56,000

3. Cash receipts from customers

= Sales revenue + Accounts receivables January 1 - Accounts receivables, December 31

= $175,000 + $16,000 - $7,000

= $184,000