Practical Company had sales of $315,000 for the year. The company reported accounts receivable of $30,000 at

Question:

Practical Company had sales of $315,000 for the year. The company reported accounts receivable of $30,000 at the end of last year and $34,000 at the end of this year. Practical’s cost of goods sold this year was $246,000. In last year’s statement of financial position, the company reported inventory of $49,000 and accounts payable of $33,000. In this year’s statement of financial position, Practical reported inventory of $43,000 and accounts payable of $37,000.

Required:

i. Calculate the amount of cash that Practical Company collected from customers during the year.

ii. Calculate the amount of cash that Practical paid to suppliers for inventory during the year.

Accounts Payable
Accounts payable (AP) are bills to be paid as part of the normal course of business.This is a standard accounting term, one of the most common liabilities, which normally appears in the balance sheet listing of liabilities. Businesses receive... Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that...