During 2011, Franklin Company reported revenues on an accrual basis of $70,000. Accounts receivable decreased during the year from $35,000 at the beginning to $24,500 at the end. How much cash was provided by collections from customers during the year?
A) $45,500
B) $59,500
C) $70,000
D) $80,500

Question

Quizplus · Accepted Answer

The cash collected from customers is calculated by adding the decrease in accounts receivable to the reported revenues: $70,000 + ($35,000 - $24,500) = $80,500.

During 2011, Franklin Company Reported Revenues on an Accrual Basis