Question
ABC Corp. began operations during November 2016 and sells imported furniture on a retail basis. In December 2016, it sold furniture of $250,000, of which
ABC Corp. began operations during November 2016 and sells imported furniture on a retail basis. In December 2016, it sold furniture of $250,000, of which $100,000 was on credit. The cost of furniture that was sold by ABC was $200,000 and this was delivered by the supplier during December. However, the supplier has granted credit terms, according to which ABC paid $50,000 in December 2016 and it is obligated to pay remaining amount in January 2017. In addition to the purchase and sale of furniture in December, ABC paid $10,000 in cash for salaries. Further, ABC incurred utility expense of $15,000 and advertisement cost of $25,000 in December, which will be paid in January, 2017. In December, creditors were paid $50,000 for the furniture purchased and sold in November 2016 (show all your workings).
How much was ABCs net cash flow for December 2016?
How much was ABCs net profit for December 2016?
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