The general ledger of Link Company provides the following information: End of Year Beginning of Year Accounts Receivable $ 55 , 000 $ 94 , 000 Inventory 310 , 000 210 , 000 Accounts Payable 40 , 000 65 , 000 \begin{array} { l r c } & ext { End of Year } & ext { Beginning of Year } \ ext { Accounts Receivable } & \$ 55,000 & \$ 94,000 \ ext { Inventory } & 310,000 & 210,000 \ ext { Accounts Payable } & 40,000 & 65,000\end{array} Accounts Receivable Inventory Accounts Payable End of Year $55 , 000 310 , 000 40 , 000 Beginning of Year $94 , 000 210 , 000 65 , 000 The company's net sales for the year was $2200000 and cost of goods sold amounted to $1500000.InstructionsCompute the following:(a) Cash receipts from customers.(b) Cash payments to suppliers.

Question

The general ledger of Link Company provides the following information:    End of Year   Beginning of Year   Accounts Receivable  $ 55 , 000 $ 94 , 000  Inventory  310 , 000 210 , 000  Accounts Payable  40 , 000 65 , 000 \begin{array} { l r c }  &  	ext { End of Year }  &  	ext { Beginning of Year } \	ext { Accounts Receivable }  &  \$ 55,000  &  \$ 94,000 \	ext { Inventory }  &  310,000  &  210,000 \	ext { Accounts Payable }  &  40,000  &  65,000\end{array}  Accounts Receivable   Inventory   Accounts Payable  ​  End of Year  $55 , 000 310 , 000 40 , 000 ​  Beginning of Year  $94 , 000 210 , 000 65 , 000 ​   The company's net sales for the year was $2200000 and cost of goods sold amounted to $1500000.InstructionsCompute the following:(a) Cash receipts from customers.(b) Cash payments to suppliers.

Peggy Andris · Accepted Answer

Final Answer :

(a) Cash receipts from customers
Sales + Decrease in Accounts Receivable
$2200000 + $39000 = $2239000
(b) Cash payments to suppliers First calculate the amount of purchases:

$1500,000‾\begin{array}{lc}\text { Beginning inventory } & \$ 210,000 \\\text { Add: Purchases }& ? \\&?\\\text { Less: Ending inventory } & \underline{310,000} \\\text { Cost of goods sold } & \underline{\$1500,000}\end{array}

$210000 + Purchases - $310000 = $1500000
Purchases = $1600000
Amount of cash payments to suppliers = Purchases + Decrease in accounts payable
= $1600000 + $25000 = $1625000

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