Question

Accounts receivable arising from sales to customers amounted to $76000 and $72000 at the beginning and end of the year, respectively. Income reported on the income statement for the year was $283000. Exclusive of the effect of other adjustments, the cash flows from operating activities to be reported on the statement of cash flows is (A) $278000.(B) $283000.(C) $287000.(D) $211000.

Answer 1

Answer:

(C) $287,000

Explanation:

Income from Operations = $283,000

Add: Opening accounts receivables = $76,000

Less: Closing Accounts Receivables = $72,000

Therefore, Cash flow from operating activities = $287,000

Here, we assume that openings accounts receivables have been realized and closing are yet outstanding. Therefore, opening accounts receivables shall be added and closing shall be deducted.

Final Answer

Therefore, the correct option is = (C) $287,000