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Given the Following Information, Indicate the Cash Flow Amounts in the Blanks

Question 122

Essay

Given the following information, indicate the cash flow amounts in the blanks provided.(Note that the ABCCompany uses a just-in-time inventory system and there is no beginning or ending inventory).
ABC CompanyIncome StatementFor the Year Ended December 31, Year 2 Cash Flow Sales revenue, 75% on credit $200,000$ Accounts receivable balance  December 31, Year 1, $50,000 December 31, Year 2, $60,000 Cost of good sold. 100% on credit $60,000$Accounts payable balance December 31, Year 1,$15,000 December 31 , Year 2,$12,000  Expenses: Salaries and Wages $26,000$ Accrued wages payable balance  December 31, Year 1, $1,500 December 31, Year 2, $1,600  Depreciation expense$2,500$ Rent expense $1,500$No accruals Income tax expense $5,500$Taxes payable balance  December 31, Year 1, $1,000 December 31 , Year 2,$2,000 Total expenses $35,500Net income $104,500 Cash flow from operating activities$\begin{array}{llcc}\text {ABC Company}\\\text {Income Statement}\\\text {For the Year Ended December 31, Year 2}\\&&\underline{\text { Cash Flow }}\\ \text {Sales revenue, \( 75 \% \) on credit } &\$200,000&\$\underline{\quad\quad}\\ \text { Accounts receivable balance } &\\ \text { December 31, Year 1, \( \$ 50,000 \)} &\\ \text { December 31, Year 2, \( \$ 60,000 \) } &\\ \text {Cost of good sold. \( 100 \% \) on credit } &\$60,000&\$\underline{\quad\quad}\\ \text {Accounts payable balance } &\\ \text {December 31, Year \( 1, \$ 15,000 \) } &\\ \text {December 31 , Year \( 2, \$ 12,000 \) } &\\ \text { Expenses:} &\\ \text { Salaries and Wages } &\$26,000&\$\underline{\quad\quad}\\ \text { Accrued wages payable balance } &\\ \text { December 31, Year 1, \( \$ 1,500 \) } &\\ \text {December 31, Year 2, \( \$ 1,600 \) } &\\ \text { Depreciation expense} &\$2,500&\$\underline{\quad\quad}\\ \text { Rent expense } &\$1,500&\$\underline{\quad\quad}\\ \text {No accruals } &\\ \text {Income tax expense } &\underline{\$5,500}&\$\underline{\quad\quad}\\ \text {Taxes payable balance } &\\ \text { December 31, Year 1, \( \$ 1,000 \)} &\\ \text { December 31 , Year \( 2, \$ 2,000 \) } &\\ \text {Total expenses } &\underline{\$35,500}\\ \text {Net income } &&\underline{\$104,500}\\ \text { Cash flow from operating activities} &&\$\underline{\quad\quad}\\\end{array}

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