Bagley Company's accounts receivable arising from sales to customers amounted to $120,000 and $105,000 at the beginning and end of the year, respectively.Income reported on the income statement for the year was $457,000.Exclusive of the effect of other adjustments, the cash flows from operating activities to be reported on the statement of cash flows is
A)$457,000.
B)$472,000.
C)$562,000.
D)$442,000.

Question

Quizplus · Accepted Answer

The decrease in accounts receivable of $15,000 ($120,000 - $105,000) indicates that cash collected from customers was $15,000 more than the sales revenue recognized. Therefore, the cash flows from operating activities would be $457,000 (income) + $15,000 (decrease in accounts receivable) = $472,000.

Bagley Company's Accounts Receivable Arising from Sales to Customers Amounted