Carson Enterprises' comparative balance sheets included accounts receivable of $220,300 at December 31, 2014, and $200,900 at December 31, 2015.Sales reported on Carson's 2015 income statement amounted to $2,350,000.What is the amount of cash collections that Carson will report in the Operating Activities category of its 2015 statement of cash flows assuming that the direct method is used?

Question

Quizplus · Accepted Answer

The cash collections can be calculated by adjusting the sales for the change in accounts receivable: $2,350,000 (sales) + ($220,300 - $200,900) (decrease in accounts receivable) = $2,369,400.

Carson Enterprises' Comparative Balance Sheets Included Accounts Receivable of $220,300