Ask Question
14 September, 20:45

flagler company purchased $4,000 of merchandise on account. flagler sold the merchandise to a customer for $7,000 cash. what is the increase in gross margin and the net change in cash flow from operating activities as a result of these transactions

+3
Answers (1)
  1. 14 September, 21:06
    0
    The answer is:

    Gross profit = $3,000

    Net change in cash flow is the inflow of $7,000 to be collected from customers.

    Explanation:

    Gross profit equals Revenue minus Cost of Sales.

    Revenue is $7,000

    Cost of sales is $4,000

    Therefore, gross profit =

    $7,000 - $4,000

    =$3,000.

    Net change in cash flow from operating activities will be the inflow of $7,000 that will be collected from customers.

    Cash collected from customers is a line item in cash flow under operating activities section.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “flagler company purchased $4,000 of merchandise on account. flagler sold the merchandise to a customer for $7,000 cash. what is the ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers