P3-61A. (Learning Objective 1: Linking accrual accounting and cash flows) Catdog Corporation earned revenues of $45 million during 20X7 and ended the year with net income of $8 million.

During 20X7, Catdog collected $25 million from customers and paid cash for all of its expenses plus an additional $5 million for amounts payable at December 31, 20X6. Answer these questions about Catdog’s operating results, financial position, and cash flows during 20X7:

Requirements 1. How much were Catdog’s total expenses? Show your work.

2. Identify all the items that Catdog will report on its 20X7 Income Statement. Show each amount.

3. Catdog began 20X7 with receivables of $6 million. All sales are on account. What was the company’s receivables balance at the end of 20X7? Identify the appropriate financial statement, and show how Catdog will report ending receivables in its 20X7 annual report.
4. Catdog began 20X7 owing accounts payable of $8 million. All expenses are incurred on account. During 20X7, Catdog paid $41 million on account. How much in accounts payable did the company owe at the end of 20X7? Identify the appropriate financial statement and show how Catdog will report accounts payable in its 20X7 annual report.