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FR Cash

The balance sheet and income statement for Bertha's Bridal Boutique are presented along with some additional information about the accounts
- All accounts receivable and accounts payable are related to trade merchandise. Accounts payable are recorded net and always are paid to take all the discounts allowed. The allowance for doubtful accounts at the end of 2011 was the same as at the end of 2010; no receivables were charged against the allowance during 2011.
- The proceeds from the note payable were used to finance a new warehouse; Capital stock was sold to provide additional working capital.

Answer the following questions concerning cash flows for the period.
a. Calculate the cash collected during 2011 from accounts receivable.
b. Calculate the cash payment during 2011 on accounts payable to suppliers.
c. Calculate the cash provided from operations for 2011
d. Calculate the cash inflows during 2010 from financing activities.
e. Calculate the cash outflows from investing activities during 2011.

Balance Sheet
December 31
2011 2010
Assets
Current assets
Cash $ 450,000 $ 364,000
Accounts receivable - net 692,000 625,000
Inventory 723,000 610,000
Prepaid expenses 50,000 70,000
Total current assets 1,915,000 1,669,000
Long-term investments 150,000 20,000
Property, plant, and equipment 1,622,000 815,000
Less: Accumulated depreciation (100,000) (75,000)
1,522,000 740,000 Total $3,587,000 $2,429,000 assets

Liabilities and Stockholders' Equity
Current liabilities
Accounts payables $ 399,000 $ 451,000
Accrued expenses 185,000 179,000
Dividends payable 50,000 _________
Total current liabilities 634,000 630,000
Notes payable - due 2014 750,000 ________
Stockholders' Equity
Common stock 1,400,000 1,300,000
Retained earnings 803,000 499,000
Total stockholders' equity 2,203,000 1,799,000
Total liabilities and stockholders' equity $3,587,000 $2,429,000

Income Statement
Years Ended December 31,
2011 2010
Net credit sales $7,200,000 $6,500,000
Cost of goods sold 4,320,000 3,900,000
Gross profit 2,880,000 2,600,000
Operating expenses (including income taxes) 2,376,000 2,145,000
Net income $ 504,000 $ 455,000

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Solution Summary

The following posting helps with problems involving balance sheets and income statements.

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