Question

Western Country Corporation made sales of $ 850 million during 2018. Of this​ amount, Western Country collected cash for $ 710 million. The​ company's cost of goods sold was $ 255 ​million, and all other expenses for the year totaled $ 425 million. Also during 2018​, Western Country paid $ 400 million for its inventory and $ 285 million for everything else. Beginning cash was $ 85 million.

Answer 1

Answer:

We have to find Western Country Corporation's net income, and cash balance at the end of 2018.

The answers are:

Net Income = $200 million

Ending cash balance = $100 million

Explanation:

Net income is equal to sales revenue - cost of goods sold - other expenses

Net Income = $850 million - $255 million - 425 million

                   = $200 million

Ending cash balance is equal to beginning cash + cash receipts (inflows) - cash payments (outflows)

Ending cash balance = $85 million + $710 million - $400 million - $285 million

                                   = $110 million