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Problem - Lulu Zola Company reported net income of RM200,000.00 for the current year. Depreciation recorded on buildings and equipment amounted to RM80,000.00 for the year. Balances of the current asset and current liability accounts at the beginning and end of the year are as follows:
End of Year
Beginning of Year
Cash
RM20,000.00
RM15,000.00
Accounts receivable
24,000.00
32,000.00
Inventories
50,000.00
65,000.00
Prepaid expenses
7,500.00
5,000.00
Accounts payable
12,000.00
18,000.00
Income taxes payable
1,600.00
1,200.00
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