# Net Income vs Cash Flow...are they the same thing?

1. Johnson Company earned revenue of \$15,000 for the current year, all of which was received in cash. Additionally, Johnson paid \$10,000 of expenses, all in cash.

a. What was the net income for the period? ____________

b. How much cash was generated for the period? ____________

2. Johnson Company earned revenue of \$15,000 for the current year. A total of \$12,000 was collected in cash, and the rest was on account. Additionally, Johnson paid \$8,000 of expenses, all in cash.

a. What was the net income for the period? ____________

b. How much cash was generated for the period? ____________

c. How would you derive the cash collected, starting from the net income figure?

3. Johnson Company earned revenue of \$15,000 for the current year. A total of \$12,000 was collected in cash, and the rest was on account. Additionally, Johnson had \$8,000 of expenses, but only paid \$6,000 of those expenses in cash (the rest was on account).

a. What was the net income for the period? ____________

b. How much cash was generated for the period? ____________

c. How would you derive the cash collected, starting from the net income figure?

4. Wellington Company earned revenue of \$15,000 for the year, and collected the entire amount in cash. Wellington had \$12,000 in expenses. Of the expenses, \$9,000 were paid in cash, and \$3,000 was Depreciation Expense.

a. What was the net income for the period? ____________

b. How much cash was generated for the period? ____________

c. How would you derive the cash collected, starting from the net income figure?

5. Fordham Company earned revenue of \$30,000 and incurred expenses of \$20,000. The beginning balance of Accounts Receivable was \$12,000 and the ending balance was \$10,000.

a. What was the net income for the period? ____________

b. How much cash was generated for the period? ____________

c. How would you derive the cash collected, starting from the net income figure?

6. Fordham Company earned revenue of \$30,000 and incurred expenses of \$20,000. The beginning balance of Accounts Receivable was \$12,000 and the ending balance was \$10,000. Accounts Payable went from \$9,000 to \$6,000 during the period. One of the expenses was for depreciation, in the amount of \$1,000.

a. What was the net income for the period? ____________

b. How much cash was generated for the period? ____________

c. How would you derive the cash collected, starting from the net income figure?