Calculate certain information for direct method (Learning Objective 4)

10–15 min.

Requirements Compute the following items for the statement of cash flows:

1. The beginning and ending Accounts Receivable balances are $26,000 and

$31,000, respectively. Credit sales for the period total $147,000. How much are cash collections?

2. Cost of Goods Sold is $94,000. Beginning Inventory balance is $31,000, and ending Inventory balance is $34,000. Beginning and ending Accounts Payable are

$4,000 and $9,000, respectively. How much are cash payments for inventory?

AppendixLO1