Question

c. W Co. had a $3,000 beginning balance in accounts payable on January 1, Year 8. During Year 8. the company incurred $73,000 of operating expenses on account. The ending balance in accounts payable was $8,500. Based on this information alone, determine the amount of cash paid to settle accounts payable. W Co. Accounts Payable Summary Beginning accounts payable balance Plus: Minus: Ending accounts payable balance d. W Co. had a $6,750 beginning balance in accounts payable on January 1 Year 8. During Year 8, the company paid $82,000 cash to settle accounts payable. The ending balance in accounts pay. able was $10,800. Based on this information alone, determine the amount of expenses incurred on account w Co. Accounts Payable Summary Beginning accounts payable balance Plus: Minus: Ending accounts payable balance

Answer 1

c. Amount of cash paid to settle accounts payable: $ 67,500.

W Co. Account Payable Summary
Beginning accounts payable	$ 3,000
Add: Operating expenses on account	73,000
Minus: Cash paid	67,500
Ending accounts payable	$ 8,500

d. Amount of expense incurred on account : $ 86,050

W. Co. Accounts Payable Summary
Beginning accounts payable	$ 6,750
Add: Expenses incurred on account	86,050
Minus: Cash paid	82,000
Ending accounts payable	$ 10,800

c. Amount of cash collections from accounts receivable: $ 97,900.

W Co. Accounts Receivable Summary
Beginning AR balance	$ 11,300
Increase in AR	102,400
Reduction in AR	97,900
Ending AR balance	15,800

d.

W Co. Accounts Receivable Summary
Beginning AR balance	$ 18,000
Increase in AR	135,500
Reduction in AR	125,000
Ending AR balance	28,500

Ex 2-17B :

a. Amount of revenue recognized during the accounting period : $ 58,500

b. Net income earned during the accounting period = $ 58,500 - $ 53,000 = $ 5,500.

c. Cash flow from operating activities = $ 65,000 - $ 53,000 = $ 12,000.

d. Net income is computed on accrual basis, while net cash flows from operations is computed on cash basis.