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20 October, 13:36

Accounts receivable arising from sales to customers amounted to $120,000 and $51,000 at the beginning and end of the year, respectively. Income reported on the income statement for the year was $214,000. Exclusive of the effect of other adjustments, the cash flows from operating activities to be reported on the statement of cash flows isa. $265,000b. $283,000c. $214,000d. $145,000

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  1. 20 October, 13:43
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    b. $283,000

    Explanation:

    Basically there are three types of activities:

    1. Operating activities: It includes those transactions which affect the working capital, and it records transactions of cash receipts and cash payments.

    2. Investing activities: It records those activities which include purchase and sale of the fixed assets

    3. Financing activities: It records those activities which affect the long term liability and shareholder equity balance.

    So, the calculations are shown below:

    Cash flow from Operating activities

    Net income $214,000

    Add: Decrease in accounts receivable $69,000 ($120,000 - $51,000)

    Net Cash flow from Operating activities $283,000
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Home » Business » Accounts receivable arising from sales to customers amounted to $120,000 and $51,000 at the beginning and end of the year, respectively. Income reported on the income statement for the year was $214,000.
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