Question

P1-3 (Algo) Comparing Income with Cash Flow L01-1 Huang Trucking Company was organized on January 1. At the end of the first quarter (three months) of operations, the owner prepared a summary of its activities as shown in the first row of the following tabulation: Required: 1. For each of the six transactions given in this tabulation, enter what you consider to be the correct amounts. The first transaction is illustrated. (Amounts to be deducted and losses/outflows should be indicated with a minus sign.) Computation of Income Cash 71,000 $ 49,000 a. $ Summary of Transactions Services performed for customers, $71,000, of which $22,000 remained uncollected at the end of the quarter b. Cash borrowed from the local bank, $50,000 (one-year note). Small service truck purchased at the end of the quarter to be used in the business for two years C. starting the next quarter, cost, $10,700 cash d. Wages earned by employees, $21,100, of which one-half remained unpaid at the end of the quarter Service supplies purchased for use in the business, $5,170 cash, of which $2,860 were unused (still on hand) at the end of the quarter. 1. Other operating expenses, $30,000, of which $5,300 remained unpaid at the end of the quarter. g. Based only on these transactions, compute the following for the quarter: Income (or loss) Cash inflow (or outflow) e.

Answer 1

		Computation of
S.No.	Summary of Transactions	Income	Cash
a	Services performed for Customer	71,000	49,000
b	Cash Borrowed from Bank		50,000
c	Truck Purchased at the end of quarter to used for two year from next quarter		-10,700
d	Wages Earned, 1/2 are unpaid i.e. 10,550 are paid	-21,100	-10,550
e	Supplies purchased for $ 5170, Unused Supplies $ 2860, Used Supplies (5170-2860)	-2,310	-5,170
f	Other Operating Expenses $ 30,000, $ 6300 are unpaid i.e. 23700 are paid	-30,000	-23,700
	Income or (Loss)	17,590
	Cash Inflow or (Outflow)		48,880