Tim Company had sales of $30,000,increase in accounts payable of $5,000,decrease in accounts receivable of $1,000,increase in inventories of $4,000,and depreciation expense of $4,000.What was the cash collected from customers?
A)$31,000
B)$35,000
C)$34,000
D)$25,000
E)$26,000

Question

Quizplus · Accepted Answer

The cash collected from customers can be calculated by adjusting the sales for changes in accounts receivable. Since there was a decrease in accounts receivable of $1,000, it means that $1,000 of sales that were previously not collected in cash are now collected. Therefore, the cash collected from customers is $30,000 (sales) + $1,000 (decrease in accounts receivable) = $31,000. Changes in accounts payable, inventories, and depreciation expense do not affect the cash collected from customers directly.

Tim Company Had Sales of $30,000,increase in Accounts Payable of $5,000,decrease