AC 310 Lab Problems

Cash Flow Practice 10.5.2021

1. Green Company made $5,000,000 of sales to customers on account during 2020. During
the same year, Accounts Receivable increased by $10,000. How much cash did Green
Collect from customers?

2. Yellow Company collected $600,000 of cash from credit customers during 2020, and the
Accounts Receivable balance increased during the year by $20,000. If the beginning
balance in Accounts Receivable was $40,000, then what would Yellow report as Sales
Revenue for 2020?

3. Salaries Payable for Blue, Inc. increased by $5,000 during the first quarter of 2021.
During this time, Salaries Expense reported was $315,000. How much did Blue pay for
Salaries in the first quarter of 2021?

4. Magenta Company sold a Building to Colorful, Inc. for $8,000,000 on March 5, 2021.
The Building originally cost Magenta $10,000,000, and the company recorded a
$1,000,000 gain on sale of the building. Prepare the journal entry for the sale and
describe how this will be presented in Magenta’s 2021 Statement of Cash Flows.

5. Retained Earnings for Orange, Inc, was $5,000 on January 1, 2020. Orange had Net
Income (after taxes) of $45,000, and the Retained Earnings Balance was $30,000 after
closing entries were made for December 31, 2020. During this time, the Dividends
Payable account also increased by $20,000. How much cash will Orange report in the
financing section of the cash flow statement as “Cash Paid for Dividends”?

6. Retained Earnings for Orange, Inc, was $5,000 on January 1, 2020. Orange had Net
Income (after taxes) of $45,000, and the Retained Earnings Balance was $30,000 after
closing entries were made for December 31, 2020. How much cash will Orange report in
the financing section of the cash flow statement as “Cash Paid for Dividends”?