Question

Dixie Duck Corporation made sales of $750 million during 2014. Of this amount, Dixie Duck collected cash for all but $27 million. The company's cost of goods sold was $280 million, and all other expenses for the year totaled $450 million. Also during 2014, Dixie Duck paid $425 million for its inventory and $300 million for everything else. Beginning cash was $95 million. Dixie Duck's top management is interviewing you for a job and they ask two questions: a. How much was Dixie Duck's net income for 2014? b. How much was Dixie Duck's cash balance at the end of 2014? You will get the job only if you answer both questions correctly. (Enter all amounts in millions.)

Answer 1

(a) -- How much was Dixie Duck's net income for 2014?

Answer -

	Particulars	Explanation	Amount
I.	Sales revenue	Given in question	$750 million
II.	Cost of goods sold	Given in question	$280 million
III.	All other expenses	Given in question	$450 million
Net income		I - II - III	$20 million

.

(b) -- How much was Dixie Duck's cash balance at the end of 2014?

Answer -

	Particulars	Explanation	Amount
I.	Beginning Cash Balance	Given in question	$95 million
II.	Collections	$750 million - $27 million	$723 million
III.	Payment for inventory	Given in question	$425 million
IV.	Payments for other expenses	Given in question	$300 million
Cash balance at the end		I + II - III - IV	$93 million