Assume zero opening balances for all balance sheet accounts.
$\bullet$Credit sales of $100 000, of which $80 000 was received at year end
$\bullet$Paid wages of $40 000
$\bullet$Depreciation expenses was $8000
Net profit and cash flow from operations are respectively?
A) $32 000; $40 000
B) $52 000; $32 000
C) $52 000; $40 000
D) None of the answers provided

Question

Quizplus · Accepted Answer

Net profit is calculated as sales ($100,000) minus wages ($40,000) and depreciation ($8,000), resulting in $52,000. Cash flow from operations is cash received ($80,000) minus wages paid ($40,000), resulting in $40,000.

Assume Zero Opening Balances for All Balance Sheet Accounts ∙\bullet∙ Credit Sales of $100 000, of Which $80 000 Was

Assume Zero Opening Balances for All Balance Sheet Accounts $\bullet$ Credit Sales of $100 000, of Which $80 000 Was