Cash Flows from Operating Activities—Direct MethodThe cash flows from operating activities are reported by...

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Accounting

Cash Flows from Operating Activities—Direct Method
The cash flows from operating activities are reported by thedirect method on the statement of cash flows. Determine thefollowing:
a. If sales for the current year were $509,900and accounts receivable decreased by $32,600 during the year, whatwas the amount of cash received from customers?
$
b. If income tax expense for the current yearwas $44,200 and income tax payable decreased by $4,400 during theyear, what was the amount of cash payments for income taxes?
$
c. Briefly explain why the cash received fromcustomers in part (a) is different from sales.
Because the customers paid than the amount of sales for the period,cash received from customers sales made on account by $32,600during the current year.

Answer & Explanation Solved by verified expert

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ACash received from the customers would be that reduced valueof 32600the sales during the year 509900That is totalling to 542500Because the account receivable will be reduced only when theamount is paid by the customers or by See Answer

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In: AccountingCash Flows from Operating Activities—Direct MethodThe cash flows from operating activities are reported by the...Cash Flows from Operating Activities—Direct MethodThe cash flows from operating activities are reported by thedirect method on the statement of cash flows. Determine thefollowing:a. If sales for the current year were $509,900and accounts receivable decreased by $32,600 during the year, whatwas the amount of cash received from customers?$b. If income tax expense for the current yearwas $44,200 and income tax payable decreased by $4,400 during theyear, what was the amount of cash payments for income taxes?$c. Briefly explain why the cash received fromcustomers in part (a) is different from sales.Because the customers paid than the amount of sales for the period,cash received from customers sales made on account by $32,600during the current year.