Van Cleef Company's comparative balance sheet and income statement for last year appear below: The company declared and paid $18,000 in cash dividends during the year. The company uses the direct method to determine the net cash provided by operating activities.
-On the statement of cash flows, the sales revenue adjusted to a cash basis would be:
A) $697,000
B) $720,000
C) $743,000
D) $774,000

Question

Van Cleef Company's comparative balance sheet and income statement for last year appear below:   The company declared and paid $18,000 in cash dividends during the year. The company uses the direct method to determine the net cash provided by operating activities.
-On the statement of cash flows, the sales revenue adjusted to a cash basis would be:
A) $697,000 
B) $720,000 
C) $743,000 
D) $774,000

Quizplus · Accepted Answer

To determine sales revenue adjusted to a cash basis, we need to start with net sales (as shown on the income statement) and adjust for changes in accounts receivable. The increase in accounts receivable is $12,000 ($95,000 - $83,000) so we subtract that from net sales to get $743,000. Therefore, the correct answer is C) $743,000.

Van Cleef Company's Comparative Balance Sheet and Income Statement for Last