Question

9252Fnews Module 5 Homework 4 Por each of the following terms, calculate the cath sources or cash wes that should be recognized on the statement of cath Rows for Batin Co for the year ended December 2019 Required • Sales on account we collectible amounted to $763,000 and accounts recente decreased by 524 600 How much cash was collected from customer 03.000 income test de 335 500 How much is uid for

Answer 1

In the Statement Cash flows the Cash flow from operating activities can be calculated using direct method or indirect method.
Under indirect method the net cash generated by operating activities is calculated by adjusting Net income for non cash transactions, non operating transactions and the changes in working capital.
Under direct method the cash flows from every operating transaction which is realised or paid in cash is calculated and summed up to calculate net cash by operating activities

a) As the sales are on account , all collectible hence cash collected from sales =$762000

Futher given that the account receivables are decrease by $24000 , decrease in Account receivable reflect payment by account receivables for the credit sales made against opening or sales during the year .

Total cash collected =$76200+24000

Source

of Cash

$786000

b) For income tax

Cash paid = Income tax expenses incure durring year + Decrease in Tax payable

=133000+ 25500 =158500

Use

of Cash

$158500

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