Question

On January 1, Year 2 Grande Company had a $15,000 balance in the Accounts Receivable account and a zero balance in the Allowance for Doubtful Accounts account. During Year 2, Grande provided $66,000 of service on account. The company collected $62,500 cash from accounts receivable. Uncollectible accounts are estimated to be 2% of sales on account. What is the amount of cash flow from operating activities that would appear on the Year 2 statement of cash flows? Multiple Choice $62,500 $61,250 $66,000 $51,300

Answer 1

$62,500

Step-by-step explanation:

As we know that cash flow statement records the cash inflow and cash outflow and ignored all other transactions which are not made in cash

Since in the question it is given that $62,500 is cash collected from account receivable and the same is to be shown in the operating activities in a positive sign that indicates an inflow of cash