Cherokee Corporation earned revenues of $37 million during 2012 and ended the year with net income of $7 million. During 2012, Cherokee collected cash of $20 million from customers and paid cash for all of its expenses plus an additional $5 million on account for amounts payable at December 31, 2011. Answer these questions about Cherokee’s operating results, financial position, and cash flows during 2012:

Requirements
1. How much were Cherokee’s total expenses? Show your work.
2. Identify all the items that Cherokee will report on its 2012 income statement. Show each amount.
3. Cherokee began 2012 with receivables of $11 million. All sales are on account. What was Cherokee’s receivables balance at the end of 2012? Identify the appropriate financial statement and show how Cherokee will report its ending receivables balance in the company’s 2012 annual report.
4. Cherokee began 2012 owing accounts payable of $6 million. All expenses are incurred on account. During 2012, Cherokee paid $35 million on account. How much in accounts payable did Cherokee owe at the end of 2012? Identify the appropriate financial statement and show how Cherokee will report accounts payable in its 2012 annual report.