Question

On January 1, Year 2, Grande Company had a $66,800 balance in the Accounts Receivable account and a $2,000 balance in the Allowance for Doubtful Accounts account. During Year 2, Grande provided $169,000 of service on account. The company collected $191,100 cash from accounts receivable. Uncollectible accounts are estimated to be 1% of sales on account.
Based on this information, the amount of cash flow from operating activities that would appear on the Year 2 statement of cash flows is:

Answer 1

Answer:

Based on this information, the amount of cash flow from operating activities that would appear on the Year 2 statement of cash flows is $127,890

Explanation:

Accounts Receivable from the Year 2:

$66,800 - $2,000 + $169,000 - $ 191,000 - 1% x $169,000 = $41,110

Net cash provided by operating activities that would appear on the Year 2 statement of cash flows: $169,000 - $41,110 = $127,890