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What is the highest value of net income

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Problem: You are the accounting manager of ABC Inc, which sells laptops. Your company has the following transactions for the month of December, 2019:

  1. December 1st: Ordered 10,000 laptops from Park Inc and paid cash of $200.
  2. December 1st: Bought a delivery truck from Arthur Motors Inc for $36,000. You estimate that this delivery truck can be used for anywhere between 12 to 36 months.
  3. December 5th: Spent $20 in cash on each laptop to package it.
  4. Dec 10th: Delivered 10,000 laptops for a price of $500 to Bata Inc. and received cash for the entire order.
  5. December 20th: Ordered 5,000 laptops from Park Inc. and paid cash of $250.
  6. December 29th: Received a call from Home Inc. saying that they want 5,000 ($500 each)laptops. Home Inc. said that they can receive delivery any time between December 30th, 2019 and January 5th, 2020. You also know that Home Inc. will only be able to pay in February, 2020 as it is going through financial trouble. A credit check allowed you to find out that Home Inc. will only be able to pay between 80 - 90% of the full amount.

Your CEO, Mrs. Hop, asks you to present her some accounting numbers by the end of day on December 31st, 2019.

a) What is the highest value of net income you can report to her?

b) What is the lowest value of net income you can report to her?

c) What is the highest value of cash provided by operations you can report to her?

d) What is the lowest value of cash provided by operations you can report to her?

Reference no: EM132418929

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