Alex Company prepares its statement of cash flows using the direct method for operating activities.For the year ended December 31, 2011, Alex Company reports the following activity:

What is the amount of cash collections from customers reported by Alex Company for the year ended December 31, 2011?

Question

Alex Company prepares its statement of cash flows using the direct method for operating activities.For the year ended December 31, 2011, Alex Company reports the following activity:

What is the amount of cash collections from customers reported by Alex Company for the year ended December 31, 2011?

Quizplus · Accepted Answer

Cash collections from customers are calculated using the formula: Revenue + Beginning Accounts Receivable - Ending Accounts Receivable = Cash Collections from Customers. Plugging in the numbers provided, we get: $2,500,000 + $1,150,000 - $1,000,000 = $2,650,000. Therefore, the correct answer is choice C.

Alex Company Prepares Its Statement of Cash Flows Using the Direct