Question

The following information applies to Quality Tech, Inc.:
Quality Tech, Inc.
Income Statement
For the Year Ended June 30, 2009
Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 75,000)
Cost of goods sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (25,000)
Gross margin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50,000
Insurance expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (5,000)
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 45,000)
1. Accounts receivable started the year with a balance of $2,500 and ended the year with a balance of $500.
2. The beginning balance in accounts payable (to vendors) was $5,000, and the ending balance for the year was $3,000. Inventory at the end of the year was $1,000 more than at the beginning of the year.
3. The company started the year with $5,000 of prepaid insurance and ended the year with $5,750 of prepaid insurance.
Determine the following cash flows:
a. Cash collected from customers for sales during the year
b. Cash paid to vendors for inventory during the year
c. Cash paid for insurance during the year



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  • CreatedSeptember 01, 2014
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