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On January 1, Year 2 Grande Company had a $16,000 balance in the Accounts Receivable account and a zero balance in the Allowance for Doubtful Accounts account. During Year 2, Grande provided $104,000 of service on account. The company collected $97,000 cash from accounts receivable. Uncollectible accounts are estimated to be 2% of sales on account.

-What is the amount of cash flow from operating activities that would appear on the Year 2 statement of cash flows?
A)$97,000
B)$104,000
C)$89,520
D)$95,060

Question

[The following information applies to the questions displayed below.]

On January 1, Year 2 Grande Company had a $16,000 balance in the Accounts Receivable account and a zero balance in the Allowance for Doubtful Accounts account. During Year 2, Grande provided $104,000 of service on account. The company collected $97,000 cash from accounts receivable. Uncollectible accounts are estimated to be 2% of sales on account.

-What is the amount of cash flow from operating activities that would appear on the Year 2 statement of cash flows?
A)$97,000
B)$104,000
C)$89,520
D)$95,060

Quizplus · Accepted Answer

The cash collected from accounts receivable in the amount of $97,000 will be reported as a cash inflow for operating activities.

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