Accounts receivable arising from sales to customers amounted to $80,000 and $65,000 at the beginning and end of the year respectively.Net income reported on the income statement for the year was $150,000.Exclusive of the effect of other adjustments, the cash inflows from operating activities to be reported on the statement of cash flows are:
A) $259,000.
B) $120,000.
C) $200,000.
D) $165,000.

Question

Quizplus · Accepted Answer

Change in accounts receivables = Accounts receivables at the beginning of the year - Accounts receivables at the end of the year = $80,000 - Accounts receivable
Cash inflows from operating activities = Net income + Decrease in accounts receivables = $150,000 + $15,000 = $165,000

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