Question

Saved Help Save& Exit Subm Lansing Company's current-year income statement and selected balance sheet data at December 31 of the current and prior years follow LANSING COMPANY Income Statement For Current Year Ended December 31 Sales revenue $136, 200 Expenses Cost of goods sold Depreciation expense Salaries expense Rent expense Insurance expense Interest expense Utilities expense 55, 000 18, 500 31,000 10,300 5,100 4,900 4,100 Net income $ 7, 300 LANSING COMPANY Selected Balance Sheet Accounts At December 31 Accounts receivable Inventory Accounts payable Salaries payable Utilities payable Prepaid insurance Prepaid rent Current Year Prior Year $8, 400 2,190 $6,900 3, 280 5,700 7,200 1, 140 830 480 290 390 540 480 310 Problem 12-2AB Direct: Computing cash flows from operations LO P5 Required: Next 1 of 4 Prev

I don't know if I did it right but I still can't figure out the supplier amount

Answer 1

Suppliers payment accounts for payment made to creditors/accounts payable. Purchases are made from suppliers. Since, purchase is not given, this has to be calculated using opening inventory, cost of goods sold and closing inventory which is done below In the working notes.

The salary figure you have computed needs to be corrected as given below

Lansing company

Cash flow from operating activities

For the current year ended December 31

Cash flows from operating activities
Cash receipts from customers	137,700
Cash payment to suppliers	(55,410)
Cash payment for salary	(30,690)
Cash payment for utilities	(3,910)
Cash payment for rent	(10,470)
Cash payment for insurance	(5,250)
Cash payment for interest	(4,900)
Net cash used by operating activities	$       27,070

Working notes

Net sales	136200
Add: Beginning accounts receivables	8400
Less: Closing accounts receivables	(6900)
Cash receipts from customers	137700
Opening inventory	2190
Add: COGS	55000
less: closing inventory	(3280)
Purchases	53910
Purchases	53910
Add: closing accounts payables	7200
Less: Opening accounts payable	(5700)
Cash payment to suppliers	55410
Salaries expense	31000
Add: Opening salary payable	830
Less: closing salary payable	(140)
Cash payment for salary	30690
Utilitiy expense	4100
Add : Beginning utility payable balance	290
Less: closing utility payable balance	(480)
Cash payment for utilities	3910
Rent expense	10300
Add: Closing prepaid rent	480
Less: Beginning prepaid rent	(310)
Cash payment for rent	10470
Insurance expense	5100
Add:Ending prepaid insurance	540
Less: Closing prepaid insurance	(390)
Cash payment for insurance	5250

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