On December 31, 2018, Wellstone Company reported net income of $70,000 and sales of $210,000. The company also reported beginning and ending accounts receivable at $20,000 and $25,000, respectively. Wellstone will report cash collected from customers in its 2018 statement of cash flows (direct method) in the amount of:
A) $215,000.
B) $285,000.
C) $135,000.
D) $205,000.

Question

Quizplus · Accepted Answer

$\begin{array}{lr}
\text { Beginning balance, Accounts receivable } & \$ 20,000 \
\text { Plus Sales } & 210,000 \
\text { Minus Ending balance, Account receivable } & \underline{(25,000)} \
=\text { Cash collected from customers } & \underline{\$ 205,000}
\end{array}$ Cash$~~~~~~~~~~~205,000$
Accourts receivable$~~~~~~~~~~~ 5,000$
Bales reverue$~~~~~~~~~~~210,000$

On December 31, 2018, Wellstone Company Reported Net Income of $70,000