St. Pierre Corporation made sales of $960 million during 2010. Of this amount, St. Pierre collected cash for all but $25 million. The company’s cost of goods sold was $270 million, and all other expenses for the year totaled $300 million. Also during 2010, St. Pierre paid $370 million for its inventory and $285 million for everything else. Beginning cash was $105 million.
St. Pierre’s top management is interviewing you for a job and they ask two questions:
a. How much was St. Pierre’s net income for 2010?
b. How much was St. Pierre’s cash balance at the end of 2010? You will get the job only if you answer both questions correctly.