Tri-City Installations Company uses the direct method to prepare its statement of cash flows.Tri-City has reported sales revenues of $200,000 on its income statement for 2018.If the balance in Accounts Receivable has increased by $10,000 during the year,then $10,000 needs to be added to $200,000 to calculate collections from customers.

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While it is true that the increase in Accounts Receivable would need to be added to sales revenue to calculate total billings to customers, it does not necessarily reflect collections from customers. Collections from customers would also need to take into account any changes in the balance of Accounts Receivable from the previous year, as well as any cash received from customers for sales made in prior years. Therefore, the increase in Accounts Receivable does not directly impact the calculation of collections from customers.

Tri-City Installations Company Uses the Direct Method to Prepare Its