Answer:
A. cash collected is 442,500
B. Cash paid to suppliers is 62,000
Explanation:
A. To determine the cash collected for the period, the account that we should analyze is the accounts receivable.
Net sales 500,000
Less: Increase in accounts receivable 50,000
Less: write off 7,500
total collection 442,500
*increase in accounts receivable means lesser amount of collection than the sale on account
*write off will decrease the accounts receivable which means, it affects the cash collection computation.
B.To determine the cash paid to suppliers, let’s analyze the accounts payable account.
Increase in inventory 45,000
add: decrease in accounts payable 17,000
total cash paid to suppliers is 62,000
*increase in inventory implies an additional purchase made by the company
*decrease in accounts payable resulted from cash payment made to suppliers.
