Darling Enterprises' comparative balance sheets included accounts receivable of $220,300 at December 31,2013,and $200,900 at December 31,2014.Sales reported on Darling's
2014 income statement amounted to $2,350,000.What is the amount of cash collections
That Darling will report in the Operating Activities category of its 2014 statement of
Cash flows assuming that the direct method is used?

Question

Quizplus · Accepted Answer

To determine the cash collections from accounts receivable, we need to find the change in accounts receivable and subtract it from sales. The change in accounts receivable is $200,900 - $220,300 = -$19,400 (since the balance decreased). So, the cash collections from accounts receivable would be: $2,350,000 - (-$19,400) = $2,369,400. Therefore, the correct answer is A.

Darling Enterprises' Comparative Balance Sheets Included Accounts Receivable of $220,300