Question

Zambrano Wholesale Corporation maintains its records on a cash basis. At the end of each year the company's accountant obtains the necessary information to prepare accrual basis financial statements. The following cash flows occurred during the year ended December 31, 2021: $685,000 3,640 110,000 $798,640 Cash receipts: From customers Interest on note Loan from a local bank Total cash receipts Cash disbursements: Purchase of merchandise Annual insurance payment Payment of salaries Dividends paid to shareholders Annual rent payment Total cash disbursements $392,000 6,240 212,000 12,000 25,000 $647,240

Answer 1

ZAMBRANO WHOLESALE CORPORATION
Income Statement
For the Year Ended December 31, 2021
Revenue from Operation:
Sales	$ 716,000.00
Other Income (interest Income)	$      3,640.00
		$ 719,640.00
Expenses:
Purchases	$ 405,000.00
Insurance	$      6,860.00
Annual Rent	$    23,700.00
Interest Expenses	$      1,100.00
Salaries	$ 216,200.00
Depreciation	$    11,000.00	$ 663,860.00
Profit		$    55,780.00

a	Prepaid Insurance	$      2,080.00
b	Prepaid Rent	$    12,500.00
c	Interest Receivable	$      2,730.00
d	Interest Payable	$      1,100.00

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