Converting Net Cash Flow to Net Income Khim Lee Company reported the following cash flow information at the end of its first year in business:
|
Cash received from customers |
$235,000 |
|
Cash paid out to suppliers of inventory |
55,000 |
|
Cash paid out to employees |
77,500 |
|
Cash paid out for advertising |
12,500 |
|
Cash paid out for taxes |
30,000 |
|
Net cash flow for the year |
$60,000 |
Also known at year end was the following:
|
Amounts not yet collected from customers |
$85,000 |
|
Amounts owed to suppliers |
15,000 |
|
Wages owed to employees |
22,500 |
|
Additional taxes still owed |
10,000 |
|
Amount remaining in inventory |
0 |
Required Prepare an accrual basis income statement for the company’s first year in business.