Juno Limited draws up its statement of cash flows using the direct method. The company presents you with the following figures:
$\begin{array}{c}
&£ \
\text { Sales for the year to 31 July 2019 } &365,268 \
\text { Irrecoverable debts written off during the year } &3,765 \
\text { Trade receivables at 31 July 2019 } &77,159 \
\text { Trade receivables at 31 July 2018 } & 80,200
\end{array}$ What was the cash received from sales for the year to 31 July 2019?
A) £358,462
B) £362,227
C) £364,544
D) £372,074

Question

Juno Limited draws up its statement of cash flows using the direct method. The company presents you with the following figures:
$\begin{array}{c}
&£ \
\text { Sales for the year to 31 July 2019 } &365,268 \
\text { Irrecoverable debts written off during the year   } &3,765 \
\text { Trade receivables at 31 July 2019 } &77,159 \
\text { Trade receivables at 31 July 2018 } & 80,200
\end{array}$ What was the cash received from sales for the year to 31 July 2019?
A) £358,462
B) £362,227
C) £364,544
D) £372,074

Quizplus · Accepted Answer

The cash received from sales is calculated by adjusting the sales figure for changes in trade receivables and irrecoverable debts. Cash received = Sales - (Increase in trade receivables) - Irrecoverable debts = £365,268 - (£77,159 - £80,200) - £3,765 = £364,544.

Juno Limited Draws Up Its Statement of Cash Flows Using