During 2013, Sistronk Merchandising Company purchased $40,000 of inventory on account. The company sold inventory on account that cost $30,000 for $50,000. Cash payments on accounts payable were $24,500. There was $38,000 cash collected from accounts receivable. Sistronk also paid $9,000 cash for operating expenses. Assume that Sistronk started the accounting period with $20,000 in both cash and common stock.
Required:
a. Identify the events described in the preceding paragraph and record them in a horizontal statements model like the following one:
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b. What is the balance of accounts receivable at the end of 2013?
c. What is the balance of accounts payable at the end of 2013?
d. What are the amounts of gross margin and net income for 2013?
e. Determine the amount of net cash flow from operating activities.
f. Explain any differences between net income and net cash flow from operating activities.