The income statement of Collins Co.reported total sales revenue of $115,000 during the current year.Assume that all sales are credit sales.The company's comparative balance sheets reported a balance in accounts receivable of $17,500 at the beginning of the year and $25,000 at the end of the year.The cash inflow from customers during the current year equals:
A) $107,500.
B) $132,500.
C) $115,000.
D) $122,500.

Question

Quizplus · Accepted Answer

The cash inflow from customers is calculated by adjusting the sales revenue for the change in accounts receivable. The accounts receivable increased by $7,500 ($25,000 - $17,500), indicating that not all sales were collected in cash. Therefore, cash inflow = $115,000 (sales) - $7,500 (increase in accounts receivable) = $107,500.

The Income Statement of Collins Co