Question

On December 31, 2018, Wellstone Company reported net income of $73,000 and sales of $202,000. The company also reported beginning and ending accounts receivable at $16,500 and $27,500, respectively. Wellstone will report cash collected from customers in its 2018 statement of cash flows (direct method) in the amount of:

Answer 1

$191,000.00

Step-by-step explanation:

The cash amount of cash collected from customers is the amount of sales revenue in the year 2018 adjusted for changes in accounts receivable balances as shown by the formula below:

cash collected from customers=sales revenue+begining accounts receivable-ending accounts receivable

sales revenue=$202,000

the begining accounts receivable=$16,500

the ending accounts receivable=$27,500

It is expected that cash received would be sales less the increase in accounts receivable

cash collected from customers=$202,000+$16,500-$27,500

cash collected from customers=$191,000.00