Forten Company, a merchandiser, recently completed its calendar-year 2015 operat
ID: 2553830 • Letter: F
Question
Forten Company, a merchandiser, recently completed its calendar-year 2015 operations. For the year, (1) all sales are credit sales, (2) all credits to Accounts Receivable reflect cash receipts from customers, (3) all purchases of inventory are on credit, (4) all debits to Accounts Payable reflect cash payments for inventory and (5) Other Expenses are paid in advance and are initially debited to Prepaid Expenses. The company's income statement and balance sheets follow FORTEN COMPANY Comparative Balance Sheets December 31, 2015 and 2014 2015 2014 Assets Cash Accounts receivable Inventory Prepaid expenses $ 88,195 $ 73,000 52,000 252,000 2,000 65,830 277,500 1,500 Total current assets Equipment Accum. depreciation-Equipment 433,025 159,325 (35,875) (46,000) 379,000 107,500 Total assets $ 556,475 $440,500 Liabilities and Equity Accounts payable Short-term notes payable $ 96,000 10,000 111,000 7,000 Total current liabilities Long-term notes payable 106,000 59,575 118,000 48,750 Total liabilities Equity Common stock, $5 par value Paid-in capital in Retained earnings 166,750 150,250 123,500 165,575 162,750 37,500 190,650 excess of par, common stock Total liabilities and equity $ 556,475 $440,500Explanation / Answer
Solution:
Computation of cash received from customers Particulars Amount Beginning accounts receivables $52,000.00 Add: Sales $584,000.00 Less: Ending accounts receivables $65,830.00 Cash received from customers $570,170.00