Computing cash flow items—direct method Consider the following facts: Beginning and ending Accounts Receivable are $24,000 and $20,000, respectively. Credit sales for the period total of $68,000. The cost of goods sold is $77,000. Beginning Merchandise Inventory balance is $29,000, and ending Merchandise Inventory balance is $26,000. Beginning and ending Accounts Payable are $12,000 and $16,000, respectively Requirements Compute cash collections from customers. Compute cash payments for merchandise inventory.

Question

Computing cash flow items—direct method

Consider the following facts:

  • Beginning and ending Accounts Receivable are $24,000 and $20,000, respectively. Credit sales for the period total of $68,000.
  • The cost of goods sold is $77,000.
  • Beginning Merchandise Inventory balance is $29,000, and ending Merchandise Inventory balance is $26,000.
  • Beginning and ending Accounts Payable are $12,000 and $16,000, respectively

Requirements

  1. Compute cash collections from customers.
  2. Compute cash payments for merchandise inventory.

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