Question

Hong Kong Clothiers reported revenue of $5,200,000 for its year ended December 31, 2018. Accounts receivable at December 31, 2017 and 2018, were $321,600 and $354,500, respectively. Using the direct method for reporting cash flows from operating activities, Hong Kong Clothiers would report cash collected from customers of:

Answer 1

Answer: $5167100

Explanation:

Cash collection = $5200000+$321600- $354500 = $5,167,100

Answer 2

Answer:

Hong Kong Clothiers would report cash collected from customers of $5,167,100

Explanation:

Cash collected = Beginning accounts receivable + Sales revenue for the year - Ending account receivable

Therefore, we have:

Cash collected = $321,600 + $5,200,000 -  $354,500 = $5,167,100

Therefore, the amount of cash collected from customers that would be reported by Hong Kong Clothiers is $5,167,100.