Kingsford Customs was founded on 1 July 2019. At the end of first year's operations, the...

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Kingsford Customs was founded on 1 July 2019. At the end of first year's operations, the following summary of its activities has been prepared by the owner. (1) Borrowed cash of $60,000 from CAA Bank. (2) Employees eamed S68,800 of wages, of which $40,000 is to be paid in the next accounting period. (3) Performed customized services that generated sales revenue of $530,300, of which $300,000 remained uncollected at the end of the year. (4) Other operating expenses, including phone bills and electricity that amounted to $7,900, were incurred during the year. Of this amount, $3,000 remained unpaid at the end of the year. Show the effect on net profit and cash of each of the above transactions for this accounting period. Net profit Cash flow (1) (2) (3) (4) Kingsford Customs was founded on 1 July 2019. At the end of first year's operations, the following summary of its activities has been prepared by the owner. (1) Borrowed cash of $60,000 from CAA Bank. (2) Employees eamed S68,800 of wages, of which $40,000 is to be paid in the next accounting period. (3) Performed customized services that generated sales revenue of $530,300, of which $300,000 remained uncollected at the end of the year. (4) Other operating expenses, including phone bills and electricity that amounted to $7,900, were incurred during the year. Of this amount, $3,000 remained unpaid at the end of the year. Show the effect on net profit and cash of each of the above transactions for this accounting period. Net profit Cash flow (1) (2) (3) (4)

Answer rating: 100% (QA)

Solution Effect on Net Profit Effect on Cash flow 1 NO effect Inflow of ca... View the full answer