Question 3 (7marks) You are provided with the following information: Sales...
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Finance
Question 3 (7marks)
You are provided with the following information:
| Sales for the year | $400 000 |
| Discounts provided during the year to customers for early payment | $10 000 |
| Doubtful debts expense for the year | $5 000 |
| Opening balance of accounts receivable | $90 000 |
| Closing balance of accounts receivable | $80 000 |
| Opening balance of the provision for doubtful debts | $9 000 |
| Closing balance of the provision for doubtful debts | $8 000 |
| Cost of goods sold for the year | $60 000 |
| Purchases for the year (on credit terms) | $80 000 |
| Discounts received for early payment to suppliers | $2 000 |
| Stock write-offs owing to water damage caused by melting ice in the Antarctic | $5 000 |
| Opening balance of trade creditors | $40 000 |
| Closing balance of trade creditors | $35 000 |
| Opening balance of inventory | $10 000 |
| Closing balance of inventory | $25 000 |
Required:
- Calculate the cash receipts from customers during the year. (3.5 marks)
- Calculate the cash payments to suppliers during the year. (3.5 marks)
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