Question

The following selected account balances appeared on the financial statements of the Washington Company:

Answer 1

Answer:

Cash Collections from customers = $60,000

Cash paid to suppliers = $33,000

Explanation:

Given:

Accounts Receivable, Jan  1 = $13,000

Accounts Receivable, Dec 31 = $9,000

Accounts Payable, Jan 1 = $4,000

Accounts Payable Dec. 31 = $7,000

Merchandise Inventory, Jan 1 = $10,000

Merchandise Inventory, Dec. 31 = $15,000

Sales = $56,000

Cost of Goods Sold = $31,000

Now,

Cash Collections from customers

= Accounts Receivable, Jan  1 + Sales - Accounts Receivable, Dec. 31

= $13,000 + $56,000 - $9,000

= $60,000

also,

Purchase

= Merchandise Inventory, Dec. 31 + Cost of Goods Sold - Merchandise Inventory, Jan 1

= $15,000 + $31,000 - $10,000

= $36,000

and,

Cash paid to suppliers

= Accounts Payable, Jan 1 + Purchase - Accounts Payable Dec. 31

= $4,000 + $36,000 - $7,000

= $33,000