Vatsala Company uses the direct method for its statement of cash flow. It report

ID: 2453092 • Letter: V

Question

Vatsala Company uses the direct method for its statement of cash flow. It reports the following information regarding the year 2014:

From the income statement: Sales Revenues, $265,000 Cost of Goods Sold, $210,000 Operating expenses, $31,000

From the balance sheet:

Beginning Balance Ending Balance

Accounts Receivable: $14,500 $17,800

Inventory: 23,500 17,800

Accounts Payable: 6,000 13,500

Accrued Liabilities: 4,000 1,500

On the statement of cash flows, what amount will be shown for collections from customers? A) $261,700 B) $268,300 C) $265,000 D) $32,300

cash receipt for the customers is calculated as under:

cash receipt for customer = Revenue+Account Receivable in Begining-Account Receviable in ending

= 2,65,000+14,500-17,800

= 2,61,700

Purchases = cost of Revenue from oparation-opening inventory+closing inventory

= 2,10,000-23,500+17,800

= 204300

cash payable to the supplier = Purchases+account payable in the beingining -account payable in the ending

= 204300+6000-13500

= 196800

cash paid for operating expense = operating expense+ acccured liabilties in beginging + accrued liabilities in ending

= 31,000+4000-1500

= 33500

Cash flow statement oparating activities

cash recepits from the customer 261700

cash paid to supplier 196800

cash paid oparating expenses (33500)

--------------------------

Net cash inflow from oparations 425000

In the cash flow statement 261700 amount is shown

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