Question

The income statement for Electronic Wonders reports net sales of $91,638 million and cost of goods sold of $69,158 million. An examination of balance sheet amounts indicates accounts receivable increased $1,721 million, inventory increased $871 million, and accounts payable to suppliers decreased $1,955 million. Required: Using the direct method, calculate (1) cash received from customers and (2) cash paid to suppliers. (Enter your answers in millions (i.e., $10,100,000 should be entered as 10.1).)

Answer 1

(1) Cash received from customers

Particulars Amount'm

Net sales $91,638

Less: Increase in accounts receivable $(1,721)

Cash received from customers $89,917

(2) Cash paid to suppliers

Particulars Amount'm

Cost of Goods sold $69,158

Add: Increase in inventory $871

Add: Decrease in accounts payable $1,955

Cash paid to suppliers $71,984