50.1K
Verified Solution
Link Copied!
ABC Company uses the direct method to prepare its statement of cash flows. Presented below are selected items from its financial statements.
| | 12/31/Yr 3 | 12/31/Yr 2 |
| Accounts receivable | $89,000 | $56,000 |
| Prepaid insurance | $2,800 | $4,600 |
| Wages payable | $9,500 | $12,000 |
| Interest payable | $12,000 | $8,900 |
| Sales revenue | $860,000 | |
| Cost of goods sold | $495,000 | |
| Wages expense | $110,000 | |
| Insurance expense | $13,200 | |
| Interest expense | $19,000 | |
Which of the following would be shown in the Operating Activities section related to sales/accounts receivable?
| | A. | $33,000 would be subtracted from net income |
| | B. | Cash collected from customers of $893,000 |
| | C. | $33,000 would be added to net income |
| | D. | Cash collected from customers of $827,000 |
Answer & Explanation
Solved by verified expert
