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Chapter 23: Q6BE (page 1373)

At January 1, 2017, Eikenberry Inc. had accounts receivable of \(72,000. At December 31, 2017, accounts receivable is \)54,000. Sales revenue for 2017 total $420,000. Compute Eikenberry’s 2017 cash receipts from customers.

Short Answer

Expert verified

The business entity receives$438,000 in cash from the customer.

Step by step solution

01

Definition of Sales Revenue

The inflow of economic benefit arising from the transfer of the goods and services to the customer is known as sales revenue. It is reported in the financial statement known as the income statement.

02

Calculation of cash receipt from customers

Particular

Amount $

Sales revenue

$420,000

Add: decrease in accounts receivables

$18,000

Cash receipt from customers

$438,000

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Most popular questions from this chapter

What is the purpose of the statement of cash flows? What

information does it provide?

Question: Your roommate is puzzled. During the last year, the company in which she is a stockholder reported a net loss of \(675,000, yet its cash increased \)321,000 during the same period of time. Explain to your roommate how this situation could occur.

Data for Krauss Company are presented in E23-5.

Instructions

Prepare the operating activities section of the statement of cash flows using the indirect method.

Wainwright Corporation had the following activities in 2017:

1. Sale of land \(180,000.

4. Purchase of equipment \)415,000.

2. Purchase of inventory \(845,000.

5. Issuance of common stock \)320,000.

3. Purchase of treasury stock \(72,000.

6. Purchase of available-for-sale debt securities \)59,000.

Compute the amount Wainwright should report as net cash provided (used) by investing activities in its 2017 statement of cash flows.

Hendrickson Corporation reported net income of \(50,000 in 2017. Depreciation expense was \)17,000. The following working capital accounts changed.

Accounts receivable $11,000 increase

Available-for-sale debt securities 16,000 increase

Inventory 7,400 increase

Nontrade note payable 15,000 decrease

Accounts payable 12,300 increase

Compute net cash provided by operating activities.
See all solutions

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