Guerrero Company Engaged in the Following Events During 2012

question 133

Essay

Guerrero Company engaged in the following events during 2012:
1.Began operations by issuing common stock to investors for $40,000 cash
2.Provided services to customers on account,$95,000
3.Collected $72,000 cash from accounts receivable
4.Paid salaries of $55,000 for the year
5.Adjusted accounts to reflect estimate that 2 percent of service revenues on account would be uncollectible
Required:
Determine Guerrero's
a.net income for 2012
b.net cash flow from operating activities
c.balance in accounts receivable at the end of 2012
d.net realizable value of accounts receivable at the end of 2012
e.total assets as of December 31,2012

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Definitions:

Indirect Expenses

Costs not directly tied to a product or service, like utilities and rent.

Departments

Departments refer to distinct areas or divisions within a business or organization, each handling specific tasks or responsibilities.

Industries

Broad sectors of the economy categorized according to their primary business activities, such as technology, healthcare, or finance.

Depreciation

The systematic allocation of the cost of a physical or tangible asset over its useful life, reflecting the asset's consumption or wear and tear.