Question

Toggle Company reported sales of $310,000 and cost of goods sold of $180,000 for 20X2. During 20X2, Toggle’s accounts receivable increased by $17,000, inventory decreased by $8,000, and accounts payable decreased by $21,000.Compute the amounts to be reported by Toggle as cash received from customers, cash payments to suppliers, and cash flows from operating activities for 20X2.

Answer 1

Answer:

Cash Received from customers = $293,000

Cash payments to suppliers = $167,000

Cash flows from operating activities = $460,000

Explanation:

Cash Received from customers is calculated as follows :

Sales                                                      $310,000

Less Increase in accounts receivable  ($17,000)

Cash Received from customers         $293,000

Cash payments to suppliers  is calculated as follows :

Cost of goods sold                              $180,000

Decrease in Inventory                            $8,000

Decrease in Payable                            ($21,000)

Cash payments to suppliers                $167,000

Cash flows from operating activities is calculated as follows :

Cash Received from customers         $293,000

Cash payments to suppliers                $167,000

Cash flows from operating activities  $460,000