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Problems

110. Determine the amount of cash received from customers for each of the four independent situations below.

Sales

Accounts

Bad debt

Allowance for

Situation

revenue

receivable

expense

uncollectible

inc (dec)

accounts

Cash received

inc (dec)

from customers

1

$300,000

$ 10,000

$ 0

$ 0

$

2

300,000

(10,000)

0

0

$

3

400,000

(10,000)

2,000

1,000

$

4

400,000

10,000

2,000

(1,000)

$

Answer:

  1. $300,000 - $10,000 = $290,000

  2. $300,000 + $10,000 = $310,000

  3. $400,000 + $10,000 + $1,000 - $2,000 = $409,000

  4. $400,000 - $10,000 - $1,000 - $2,000 = $387,000

Learning Objective: 3 Level of Learning: 3

111. Determine the amount of cash paid to suppliers for each of the four independent situations below.

Cost of

Inventory

Accounts

Cash paid to suppliers

Situation

goods sold

payable

inc (dec)

inc (dec)

1

$300,000

$6,000

$ 0

$

2

300,000

0

7,000

$

3

400,000

6,000

7,000

$

4

400,000

(6,000)

(7,000)

$

Answer:

  1. $300,000 + $6,000 = $306,000

  2. $300,000 - $7,000 = $293,000

  3. $400,000 + $6,000 - $7,000 = $399,000

  4. $400,000 + $7,000 - $6,000 = $401,000

Learning Objective: 3 Level of Learning: 3

112. The accounting records of Eastlake Industries provided the data below.

Net income

$300,000

Depreciation expense

15,000

Increase in inventory

2,000

Increase in accounts receivable

1,400

Decrease in interest payable

1,600

Amortization of bond premium

3,000

Increase in accounts payable

7,000

Cash dividends paid

20,000

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