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Carter Inc. made sales of $725 million during 2020. Of this amount Carter Inc collected cash for all but $27 million. The com
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Answer #1

Sol :

a. Calculation of Net Income for 2020   

Sales made during the period2020 = $725 Millions

Less: COGS during the period2020 = $320 Millions

All the expenses for the year = $325 Millions

Net income for the year 2020 = $80 Millions

b. Calculation of Closing cash balance as at 2020.

Opening cash balance   = $85 Millions.

Add : Cash collected from sales =$698 Millions.

Less : Paid towards inventory. =$410 Millions

Less : Paid towards everything. =$250 Millions

Closing cash balance as at 2020 =$123 Millions

Note :Cash collected from sales =(725-27) =$698 Millions.

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