The income statement for Electronic Wonders reports net sales of $91,628 million and cost of goods sold of $69,148 million. An examination of balance sheet amounts indicates accounts receivable increased $1,720 million, inventory increased $870 million, and accounts payable to suppliers decreased $1,954 million. Required: Using the direct method, calculate (1) cash received from customers and (2) cash paid to suppliers.

Question

Business

Tess Hancock

22 April, 13:46

The income statement for Electronic Wonders reports net sales of $91,628 million and cost of goods sold of $69,148 million. An examination of balance sheet amounts indicates accounts receivable increased $1,720 million, inventory increased $870 million, and accounts payable to suppliers decreased $1,954 million. Required: Using the direct method, calculate (1) cash received from customers and (2) cash paid to suppliers.

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Answers (1)

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Delaney Black · Answer 1

1. Cash received from customers = $89,908

2. Cash paid to suppliers = $71,972

Explanation:

Amount in millions

Net sales $91,628

Less: Increase in accounts receivable $ (1,720)

Cash received from customers $89,908

Amount in millions

Cost of Goods sold $69,148

Add: Increase in inventory $870

Add: Decrease in accounts payable $ 1,954

Cash paid to suppliers $ 71,972