Penno Corporation recorded service revenues of $200,000 during the current year, of which $ 170,000...
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Penno Corporation recorded service revenues of $200,000 during the current year, of which $ 170,000 were on credit and $30,000 were for cash. Moreover, of the $ 170,000 credit sales, Penno collected $20,000 cash on those receivables before year-end. The company also paid $25,000 cash for wages during the year. Its employees also earned another $ 15,000 in wages during the last few weeks of the year, which were not yet paid at year-end.
Required
a. Compute the company's net income for the year.
b. How much net cash inflow or outflow did the company generate during the year? Explain why Penno's
net income and net cash flow differ.
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