Pollonia Limited draws up its statement of cash flows using the direct method. At 1 September 2018, the company had trade receivables of £75,343. During the year to 31 August 2019, the company made sales of £745,282. At 31 August 2019, the company's trade receivables totalled up to £83,897. What was the cash received from sales during the year to 31 August 2019?
A) £736,728
B) £745,282
C) £753,836
D) £904,522

Question

Quizplus · Accepted Answer

To calculate the cash received from sales using the direct method, you start with the sales figure and adjust it for the change in trade receivables. The calculation is as follows: Sales (£745,282) - Increase in trade receivables (£83,897 - £75,343 = £8,554) = Cash received from sales (£745,282 - £8,554 = £736,728).

Pollonia Limited Draws Up Its Statement of Cash Flows Using