The following information applies to Change Corporation: Change Corporation Income Statement For the Year Ended December 31,

Question:

The following information applies to Change Corporation:

Change Corporation

Income Statement

For the Year Ended December 31, 2010

Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$(55,000)

Cost of goods sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (17,250)

Gross margin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37,750

Rent expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (5,750)

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $(32,000)

1. Accounts receivable started the year with a balance of $1,050 and ended the year with a balance of $2,250.

2. The beginning balance in accounts payable (to vendors) was $650, and the ending balance was $1,550. Inventory was $1,000 less at the end of the year than it was at the beginning of the year.

3. The company started the year with $2,000 of prepaid rent and ended the year with $1,500 of prepaid rent.

Determine the following cash flows:

a. Cash collected from customers for sales during the year

b. Cash paid to vendors for inventory during the year

c. Cash paid for rent during theyear

Accounts Payable
Accounts payable (AP) are bills to be paid as part of the normal course of business.This is a standard accounting term, one of the most common liabilities, which normally appears in the balance sheet listing of liabilities. Businesses receive... Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that...