An Insurance company has recently completed its financial year-end on December 31st, 2022. You are hired...

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An Insurance company has recently completed its financial year-end on December 31st, 2022. You are hired as the accountant for the company and tasked with preparing the financial statements. Use the following information to answer the questions (a) to (g): The company had cash sales of $50,000 and credit sales of $100,000 during the year. The company uses the accrual basis of accounting. The company received $80,000 cash from customers during the year and collected accounts receivable of $90,000. The company paid $60,000 in salaries and wages to its employees during the year. The company purchased inventory worth $120,000 on credit and paid $80,000 in cash for inventory. The company sold inventory costing $80,000 for $150,000 on credit. The company incurred $30,000 in operating expenses during the year, which were paid in cash. The company received $10,000 as a dividend from investments it made in other companies during the year. Based on the given information, answer the following questions: (a) Calculate the total sales revenue for the company for the year. (b) Calculate the net income for the company for the year. (c) Explain the accrual basis of accounting and how it differs from the cash basis of accounting. (d) Calculate the gross profit margin for the company for the year. (e) Define and explain the concept of accounts receivable. (f) Calculate the operating expenses to sales ratio for the company, for the year. (g) Explain the purpose and impact of receiving a dividend from investments in other companies. An Insurance company has recently completed its financial year-end on December 31st, 2022. You are hired as the accountant for the company and tasked with preparing the financial statements. Use the following information to answer the questions (a) to (g): The company had cash sales of $50,000 and credit sales of $100,000 during the year. The company uses the accrual basis of accounting. The company received $80,000 cash from customers during the year and collected accounts receivable of $90,000. The company paid $60,000 in salaries and wages to its employees during the year. The company purchased inventory worth $120,000 on credit and paid $80,000 in cash for inventory. The company sold inventory costing $80,000 for $150,000 on credit. The company incurred $30,000 in operating expenses during the year, which were paid in cash. The company received $10,000 as a dividend from investments it made in other companies during the year. Based on the given information, answer the following questions: (a) Calculate the total sales revenue for the company for the year. (b) Calculate the net income for the company for the year. (c) Explain the accrual basis of accounting and how it differs from the cash basis of accounting. (d) Calculate the gross profit margin for the company for the year. (e) Define and explain the concept of accounts receivable. (f) Calculate the operating expenses to sales ratio for the company, for the year. (g) Explain the purpose and impact of receiving a dividend from investments in other companies.

Answer rating: 100% (QA)

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