10.Accounts receivable from sales transactions were $46,226 at the beginning of
ID: 2513739 • Letter: 1
Question
10.Accounts receivable from sales transactions were $46,226 at the beginning of the year and $62,345 at the end of the year. Net income reported on the income statement for the year was $131,314. Exclusive of the effect of other adjustments, the cash flows from operating activities to be reported on the statement of cash flows prepared by the indirect method would be
a.$16,119
b.$147,433
c.$115,195
d.$131,314
11.Land costing $139,746 was sold for $177,944 cash. The gain on the sale was reported on the income statement as other income. On the statement of cash flows, what amount should be reported as an investing activity from the sale of land?
a.$317,690
b.$38,198
c.$177,944
d.$139,746
Explanation / Answer
10. Change in Accounts receivable = $ 62,345 - $ 46,226
= $ 16,119 (increase)
cash flows from operating activities = Net Income - Increase in Accounts receivable
= $ 131,314 - $ 16,119
= $ 115,195
Hence the correct answer is c. $ 115,195
11.
The correct answer is c. $ 177,944
The cash flows from investing activity records the cash received from sale of land.
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