The sales revenue reported on the income statement for 20X1 totaled $96,000, of which one third was on credit. The 20X1 beginning balance of trade receivables was zero and the 20X1 ending balance reported on the statement of ﬁnancial position was $10,000; therefore, the 20X1 cash inﬂow from customer sales was $86,000.

Question

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The cash inflow from customer sales is equal to the sales revenue on credit plus the increase in trade receivables. In this case, the sales revenue on credit is $96,000 * 1/3 = $32,000, and the increase in trade receivables is $10,000 - $0 = $10,000. Therefore, the cash inflow from customer sales is $32,000 + $10,000 = $42,000.

The Sales Revenue Reported on the Income Statement for 20X1