Darlington Company entered into the following business events during its first month of operations. The company...
Darlington Company entered into the following business events
during its first month of operations. The company uses the
perpetual inventory system.
- 1) The company purchased $12,300 of merchandise on account under terms 4/10, n/30.
- 2) The company returned $1,800 of merchandise to the supplier before payment was made.
- 3) The liability was paid within the discount period.
- 4) All of the merchandise purchased was sold for $18,600 cash.
What is the net cash flow from operating activities as a result of the four transactions?
Homework Answers
cash collected through sales = 18600
cash paid for purchase of merchandise (after purchase return and discount) = (12300-1800)*(1-4%) = 10080
| cash flow from operating activities | |
| Cash collected from customers | 18600 |
| Cost of goods sold | (10080) |
| net cash flow from operating activities | 8520 |
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