Riverbed Corp. uses the direct method to prepare its statement of cash flows. Riverbed trial balances at December 31, 2020 and 2019, are as follows. December 31 Debits 2020 2019 Cash $34,800 $32,300 Accounts receivable 32,800 29,800 Inventory 30,900 47,000 Property, plant, & equipment 100,800 95,900 Unamortized bond discount 4,600 5,100 Cost of goods sold 252,100 378,200 Selling expenses 142,700 172,900 General and administrative expenses 136,800 152,300 Interest expense
Bad Debts
At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
21.
December 31
|
||||
Debits |
2020
|
2019
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||
Cash |
$34,800
|
$32,300
|
||
Accounts receivable |
32,800
|
29,800
|
||
Inventory |
30,900
|
47,000
|
||
Property, plant, & equipment |
100,800
|
95,900
|
||
Unamortized bond discount |
4,600
|
5,100
|
||
Cost of goods sold |
252,100
|
378,200
|
||
Selling expenses |
142,700
|
172,900
|
||
General and administrative expenses |
136,800
|
152,300
|
||
Interest expense |
4,300
|
2,600
|
||
Income tax expense |
20,400
|
60,600
|
||
$760,200
|
$976,700
|
|||
Credits | ||||
Allowance for doubtful accounts |
$1,300
|
$1,100
|
||
16,600
|
15,100
|
|||
Accounts payable |
25,300
|
15,600
|
||
Income taxes payable |
21,000
|
29,000
|
||
5,200
|
4,500
|
|||
8% callable bonds payable |
44,500
|
20,000
|
||
Common stock |
49,700
|
40,000
|
||
Paid-in capital in excess of par |
9,000
|
7,500
|
||
44,400
|
64,600
|
|||
Sales revenue |
543,200
|
779,300
|
||
$760,200
|
$976,700
|
Additional information:
1. | Riverbed purchased $4,900 in equipment during 2020. | |
2. | Riverbed allocated one-third of its depreciation expense to selling expenses and the remainder to general and administrative expenses. | |
3. |
Determine what amounts Riverbed should report in its statement of cash flows for the year ended December 31, 2020, for the following items.
(a) | Cash collected from customers. |
$
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||
(b) | Cash paid to suppliers. |
$
|
||
(c) | Cash paid for interest. |
$
|
||
(d) | Cash paid for income taxes. |
$
|
||
(e) | Cash paid for selling expenses. |
$
|
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