S3-1. (Learning Objective 1: Linking accrual accounting and cash flows) Patrick Corporation made sales of $850 million during 20X6. Of this amount, Patrick collected cash for all but $30 million. The company’s cost of goods sold was $225 million, and all other expenses for the year totaled $355 million. Also during 20X6, Patrick paid $320 million for its inventory and $265 million for everything else. Beginning cash was $140 million.

Patrick’s top management is interviewing you for a job and they ask two questions:

a. How much was Patrick’s net income for 20X6?

b. How much was Patrick’s cash balance at the end of 20X6?

You will get the job only if you answer both questions correctly.