The Following Selected Account Balances Are Taken from a Merchandising

question 7

Essay

The following selected account balances are taken from a merchandising company's records:
$$\begin{array} { | l | r | r | r | } \hline & \text { Dec. 31 } & \text { Dec. 31 } & \text { For the } \\& { 2012 } &{ 2013 } & \text { Year } 2013 \\\hline \text { Merchardise irventory } & \$ 15,600 & \mathbf { \$ 21 , 2 0 0 } & \\\hline \text { Accourits payable } & 32,400 & 27,400 & \\\hline \text { Salaries payable } & 4,400 & 3,000 & \\\hline \text { Accourts receivable } & 42,000 & 36,000 & \\\hline \text { Total assets } & 234,000 & 286,000 & \\\hline \text { Sales } & & & \$ 332,000 \\\hline \text { Cost of goods sold } & & & 165,600 \\\hline \text { Salaries expense } & & & 48,000 \\\hline\end{array}$$ (a)Calculate the cash payments made during 2013 for merchandise.Assume all of the company's accounts payable balances are a result from merchandise purchases.
(b)Calculate the cash receipts from customer sales during 2013.
(c)Calculate the cash payments for salaries during 2013.

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Definitions:

Loan Period

is the duration over which a borrower is obligated to repay a loan, from the initiation of the loan to the final payment.

Interest Rate

The amount charged by a lender to a borrower for the use of assets, expressed as a percentage of the principal, usually on an annual basis.

Rationing Function

The process through which prices distribute scarce goods and services among individuals who demand them, effectively limiting the quantity that consumers can purchase.

Incentive Function

The aspect of economic policy or mechanism designed to motivate individuals or entities to act in a certain way by offering rewards.