On January 1, Year 2, Grande Company had a $16,000 balance in the Accounts Receivable account and a zero balance in the Allowance for Doubtful Accounts account. During Year 2, Grande provided $104,000 of service on account. The company collected $97,000 cash from accounts receivable. Uncollectible accounts are estimated to be 2% of sales on account. Based on this information, the amount of cash flow from operating activities that would appear on the Year 2 statement of cash flows is:
A) $97,000.
B) $104,000.
C) $89,520.
D) $95,060.

Question

Quizplus · Accepted Answer

$97,000 cash collected from accounts receivable is a cash inflow for operating activities.

On January 1, Year 2, Grande Company Had a $16,000