Tropical Tours reported revenue of $400,000 for its year ended December 31, 2013. Accounts receivable at December 31, 2012 and 2013, were $35,000 and $32,000, respectively. Using the direct method for reporting cash flows from operating activities, Tropical Tours would report cash collected from customers of:

Question

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The decrease in accounts receivable ($35,000 - $32,000 = $3,000) indicates that cash collected from customers was $3,000 more than the revenue reported. Therefore, cash collected from customers is $400,000 + $3,000 = $403,000.

Tropical Tours Reported Revenue of $400,000 for Its Year Ended