Computing cash flow items—direct method
Consider the following facts:
a. Beginning and ending Accounts Receivable are $24,000 and $20,000, respectively. Credit sales for the period total $68,000.
b. Cost of goods sold is $77,000. Learning Objective 4 Appendix 14A Net Cash Prov. by Op. Act. $76,000 Learning Objective 4 Appendix 14A 1. Cash Receipts from Cust. $72,000 M14_NOBL4403_06_GE_C14.indd 807 22/09/2017 14:50 CHAPTER 14 808 chapter 14
c. Beginning Merchandise Inventory balance is $29,000, and ending Merchandise Inventory balance is $26,000.
d. Beginning and ending Accounts Payable are $12,000 and $16,000, respectively
Requirements
1. Compute cash collections from customers.
2. 2. Compute cash payments for merchandise inventory.