Question

The income statement for Electronic Wonders reports net sales of $91,628 million and cost of goods sold of $69,148 million. An examination of balance sheet amounts indicates accounts receivable increased $1,720 million, inventory increased $870 million, and accounts payable to suppliers decreased $1,954 million. Required: Using the direct method, calculate (1) cash received from customers and (2) cash paid to suppliers.

Answer 1

Answer:

1.  Cash received from customers = $89,908

2.  Cash paid to suppliers = $71,972

Explanation:

                                                                             Amount in millions

Net sales                                                         $91,628

Less: Increase in accounts receivable                  $(1,720)

Cash received from customers                          $89,908

                                                                           Amount in millions

Cost of Goods sold                                       $69,148

Add: Increase in inventory                               $870

Add: Decrease in accounts payable                $ 1,954

Cash paid to suppliers                                        $ 71,972