STATEMENT OF CASH FLOWS An entity provided the following data: December 31, 2017December 31, 2018 Trade accounts receivable, net of allowance 840,000 780,000Inventory1,500,0001,400,000Accounts payable 950,000 980,000 Total sales were P12,000,000 for 2018 and P11,000,000 for 2017. Cash sales were 20% of total sales each year. Cost of goods sold was P8,400,000 for 2018. Variable expenses for 2018 amounted to P1,200,000 and varied in proportion to sales. Variable expenses had been paid 50% in the year incurred and 50% the following year. Fixed expenses, including P350,000 depreciation and P50,000 bad debt expense, totaled P1,000,000 each year. Eighty percent of fixed expenses involving cash were paid in the year incurred and 20% the following year. Each year there was a P50,000 bad debt estimate and a P50,000 writeoff. 1. What amount of cash was disbursed for variable expenses during 2018?2. What amount of cash was disbursed for fixed expenses during 20

The question is based on the concept of Financial Accounting.

Answered: An entity provided the following data:…

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

Chapter1: Introduction To Business Activities And Overview Of Financial Statements And The Reporting Process

Section: Chapter Questions

Problem 37P

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STATEMENT OF CASH FLOWS

An entity provided the following data:

	December 31, 2017	December 31, 2018
Trade accounts receivable, net of allowance	840,000	780,000
Inventory	1,500,000	1,400,000
Accounts payable	950,000	980,000

Total sales were P12,000,000 for 2018 and P11,000,000 for 2017. Cash sales were 20% of total sales each year. Cost of goods sold was P8,400,000 for 2018.

Variable expenses for 2018 amounted to P1,200,000 and varied in proportion to sales. Variable expenses had been paid 50% in the year incurred and 50% the following year.

Fixed expenses, including P350,000 depreciation and P50,000 bad debt expense, totaled P1,000,000 each year. Eighty percent of fixed expenses involving cash were paid in the year incurred and 20% the following year. Each year there was a P50,000 bad debt estimate and a P50,000 writeoff.

1. What amount of cash was disbursed for variable expenses during 2018?

2. What amount of cash was disbursed for fixed expenses during 20

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