Hello! I am having a bit of trouble here. I have solved part A and B... but I am

Question

Hello! I am having a bit of trouble here. I have solved part A and B... but I am having trouble identifiying the rest to solve the problem. Any help would be appreciated!

Venture Company earned $8000 of service revenue on account during 2010. The company collected $5200 cash from accounts receivable during 2010.

Based on this information alone, determine the following.

C. The amount of net income that Venture would report on the 2010 income statement would be ________.

D. The amount of cash flow from operating activities that Venture would report on the 2010 statement would be __________

E. The amount of retained earnings that Venture would report on the 2010 balance sheet would be ___________

F. Why are the answers to C and D different? Complete the statement below…

$________ of revenue was earned buy only $ _________ of it was collected.

Explanation / Answer

C.) They would only report the 8,000 they earned. D.) Operating cash flow would be 5,200 (received from accounts receivable) - 8,000 invested in account's receivable. = -2,800 E.) They would report 5,200 as they retained earnings since this is what they collected and now have with certainty. F) 8,000 of rev. earned but only $5,200 was collected.

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