Determine the amount of cash received from customers.

Sales reported on the income statement were $480,000. The accounts receivable balance increased $54,000 over the year. Determine the amount of cash received from customers.

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Expert Solution

Statement of cash flows : It is a financial statement that indicates a company's cash and cash equivalents for a specific time. It computes the net changes in cash by reporting the sources and uses of cash resulting from a company's operating, investing, and financing activities.

Direct method : For the compilation of the statement of cash flows, the direct method employs the cash basis of accounting. It accounts for all income and costs for which cash is collected or paid.

Calculation of amount of Cash received from customers

Cash received from customers = Sales Revenue +Decrease in accounts receivable or - Increase in accounts receivable

=$480,000 - $54,000

=$426,000

Therefore, the amount of cash received from customers is $426,000

balaji rao answered 1 year ago

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