Question
You are the accounting manager of Causeway Bay Inc, which sells laptops. Your company has the following transactions for the month of December, 2019: 1)December
You are the accounting manager of Causeway Bay Inc, which sells laptops. Your company has the following transactions for the month of December, 2019:
1)December 1st: Ordered 10,000 laptops from LOHAS Park Inc and paid cash of $200.
2)December 1st: Bought a delivery truck from Sham Shui Po Motors Inc for $36,000. You estimate that this delivery truck can be used for anywhere between 12 to 36 months.
3)December 5th: Spent $20 in cash on each laptop to package it.
4)Dec 10th: Delivered 10,000 laptops for a price of $500 to Sai Ying Pun Inc. and received cash for the entire order.
5)December 20th: Ordered 5,000 laptops from LOHAS Park Inc. and paid cash of $250.
6)December 29th: Received a call from HKUST Inc. saying that they want 5,000 laptops for 500. HKUST Inc. said that they can receive delivery any time between December 30th, 2019 and January 5th, 2020. You also know that HKUST Inc. will only be able to pay in February, 2020 as it is going through financial trouble. A credit check allowed you to find out that HKUST Inc. will only be able to pay between 80 - 90% of the full amount.
Your CEO, Mrs. Lantau, asks you to present her some accounting numbers by the end of day on December 31st, 2019. What is the highest value of net income and cash provided by operations you can report to her?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started