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    Net Profit & Cash Flow

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    A firm has just ended the calendar year making a sale in the amount of $150,000 of merchandise purchased during the year at a total cost of $112,500. Although the firm paid full for the merchandise during the year, it has yet to collect at year end from the customer. The net profit and cash flow for the year are _____

    $0 and $150,000 respectively, $37,500 and -$155,000 respectively, $37,500 and -$112,500 respectively, or $150,000 and $112,500 $37,500 respectively

    please advise answer & why - thanks!

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    Solution Preview

    Answer is: $37,500 and -$112,500
    Net profit: On accrual basis so it ...

    Solution Summary

    The expert examines net profits and cash flows.