On December 31,2016,Wellstone Company reported net income of $70,000 and sales of $210,000.The company also reported beginning and ending accounts receivable at $20,000 and $25,000,respectively.Wellstone will report cash collected from customers in its 2016 statement of cash flows (direct method)in the amount of:

Question

Quizplus · Accepted Answer

To calculate the cash collected from customers, we need to adjust the sales figure for changes in accounts receivable. The formula for this calculation is:

Cash collected from customers = Sales - (Ending AR - Beginning AR)

Substituting the given values, we get:

Cash collected from customers = $210,000 - ($25,000 - $20,000) = $205,000

Therefore, the answer is D ($205,000).

On December 31,2016,Wellstone Company Reported Net Income of $70,000 and Sales