Bennett Company reported sales on its income statement last year of $345,000.On the company's statement of cash flows,sales adjusted to a cash basis were $337,000.(The company uses the direct method to determine the net cash provided by operating activities. )Bennett Company reported the following account balances on its comparative balance sheet: Based on this information,the beginning Accounts Receivable balance was:
A)$12,000
B)$17,000
C)$28,000
D)$14,000

Question

Bennett Company reported sales on its income statement last year of $345,000.On the company's statement of cash flows,sales adjusted to a cash basis were $337,000.(The company uses the direct method to determine the net cash provided by operating activities. )Bennett Company reported the following account balances on its comparative balance sheet:  Based on this information,the beginning Accounts Receivable balance was:
A)$12,000 
B)$17,000 
C)$28,000 
D)$14,000

Quizplus · Accepted Answer

As shown below,an increase in accounts receivable during the period would result in less cash being received during the period and cash sales being lower than accrual sales.If accounts receivable increased by $8,000 during the period and the ending balance is $20,000,then the beginning balance must have been $12,000.
 11eaa48f_7aeb_224c_9e4a_ed35644fd4c1_TB2485_00

Bennett Company Reported Sales on Its Income Statement Last Year