1. Accounts receivable arising from sales to customers amounted to $120,000 and
ID: 2502038 • Letter: 1
Question
1. Accounts receivable arising from sales to customers amounted to $120,000 and $51,000 at the beginning and end of the year, respectively. Income reported on the income statement for the year was $214,000. Exclusive of the effect of other adjustments, the cash flows from operating activities to be reported on the statement of cash flows is
a. $265,000
b. $283,000
c. $214,000
d. $145,000
2. Accounts receivable arising from sales to customers amounted to $33,000 and $50,000 at the beginning and end of the year, respectively. Income reported on the income statement for the year was $122,000. Exclusive of the effect of other adjustments, the cash flows from operating activities to be reported on the statement of cash flows is
a. $122,000
b. $139,000
c. $105,000
d. $155,000
Explanation / Answer
1) Cah Flow from operating activities:
Income $214000
Add: Decrease in Accounts receivable (120000-51000) $69000
Cash Flow from operating activities $283000 Ans B
2)
Cah Flow from operating activities:
Income $122000
Less: Increase in Accounts receivable (50000-33000) $17000
Cash Flow from operating activities $105000 Ans C
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