The Following Selected Account Balances Are Taken from a Merchandising

question 20

Essay

The following selected account balances are taken from a merchandising company's records:
$\begin{array}{|l|r|r|l|}\hline&\text { Dec. 31 } & \text { Dec. 31 } & \text { For the } \\&2012 & 2013 & \text { Year 2013 }\\\hline \text { Merchandise inventory } & \$ 15,600 & \$ 21,200 & \\\hline \text { Accounts payable } & 32,400 & 27,400 & \\\hline \text { Salaries payable } & 4,400 & 3,000 & \\\hline \text { Accounts receivable } & 42,000 & 36,000 & \\\hline \text { Total assets } & 234,000 & 286,000 &\\\hline \text { Sales } & & & \$ 312,000 \\\hline \text { Cost of goods sold } & & & 165,600 \\\hline \text { Salaries expense } & & & 48,000\\\hline\end{array}$

(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:

Tech Support

A service provided to help customers resolve technical problems with products or services.

Time-Driven

A strategy or method that bases decisions, costs, or efficiency measurements on the amount of time taken to perform activities.

Activity-Based Costing

A pricing strategy that recognizes various tasks within a company and allocates the expenses of each task to all goods and services based on their real usage.

Customer Support

The range of services provided to assist customers in making cost-effective and correct use of a product, including assistance in planning, installation, training, troubleshooting, maintenance, and upgrading.