Cash Flow-Kazaam Company
Soal 1 kazaam company, a merchandiser, recently completed its calender-year 2011 operations. For the year, 1. all sales are credit sales, 2. all credits to account receivable reflect cash receipt from customer. 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 balance sheets and income statement follow : KAZAAM COMPANY Comparative Balance Sheet December 31 2011 and 2010 Assets 2011 2010 Cash $ 53875 $76625 Account Receivable 65000 49625 Merchandise inventory 273750 252500 Prepaid expenses 5375 6250 Equipment 159500 110000 Accumulated depreciation-equipment (34625) (44000) Total assets 522875 451000 Liabilities and equity Account