Question

The net income reported on the income statement for the current year was $226000. Depreciation recorded on plant assets was $35100. Accounts receivable and inventories increased by $2000 and $7500, respectively. Prepaid expenses and accounts payable decreased by $2100 and $12000 respectively. Using the indirect method, how much cash was provided by operating activities

Answer 1

Cash collections from clients at some point of the duration =beginning money owed receivable +internet credit income-ending accounts receivable = 1128000

= 125000+1216000-213000

= 1128000

Surely put, cash collection is the process of accumulating debts owed in your organization. these may be bills owed with the aid of a character or another business and might consist of each cutting-edge bill with an awesome balance and beyond-due money owed. you may additionally hear this referred to as payment collections.

Cash collection additionally referred to as charge collection, is a treasury characteristic that describes the method whereby an enterprise recovers coins from different groups (or individuals) to whom it has previously issued an invoice. the important thing objective of the coins series is to get invoices paid on their due date.

Cash collections typically come from one in every of two locations: coins income and collections on bills receivable. Use historical information and trends to estimate collections for every class and calculate the sum of the figures to locate general budgeted cash collections.

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