Question

The following selected account balances appeared on the financial statements of Washington Company:

Accounts Receivable, January 1 $16,099
Accounts Receivable, December 31 7,237
Accounts Payable, January 1 5,873
Accounts Payable, December 31 8,939
Merchandise Inventory, January 1 6,941
Merchandise Inventory, December 31 14,492
Sales 76,821
Cost of Merchandise Sold 36,852

Washington Company uses the direct method to calculate net cash flow from operating activities. Cash collections from customers were:_______

Answer 1

Answer:

The net Cash collections from customers were $85683.

Explanation:

The direct method for calculating net cash flow involves deducting from cash sales only operating expenses that needed cash.

Cash collections from customers by Washington company are:

Accounts Receivable, January 1 + Sales - Accounts Receivable, December 31

=$16,099 + $76,821 - $7,237

=$92,920-$7,237

=$85683

The net Cash collections from customers were $85683.