Accounts receivable arising from sales to customers amounted to $80,000 and $70,000 at the beginning and end of the year, respectively. Income reported on the income statement for the year was $252,000. Exclusive of the effect of other adjustments, the cash flows from operating activities to be reported on the statement of cash flows is
A)$252,000.
B)$242,000.
C)$262,000.
D)$332,000.

Question

Quizplus · Accepted Answer

The decrease in accounts receivable ($80,000 - $70,000 = $10,000) indicates that cash collected from customers was $10,000 more than the sales revenue reported. Therefore, the cash flows from operating activities would be $252,000 + $10,000 = $262,000.

Accounts Receivable Arising from Sales to Customers Amounted to $80,000