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14 March, 15:24

Marin Company's accounts receivable arising from sales to customers amounted to $131000 and $114000 at the beginning and end of the year, respectively. Income reported on the income statement for the year was $498000.

Exclusive of the effect of other adjustments, the cash flows from operating activities to be reported on the statement of cash flows is:

a) $498000. b) $612000. c) $481000. d) $515000.

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  1. 14 March, 16:08
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    d) $515,000

    Explanation:

    Given:

    Accounts Receivable Beginning Balance = $131,000

    Accounts Receivable Ending Balance = $114,000

    Decrease in Accounts Receivables = $17,000

    We take the difference between beginning and ending Balance of Accounts Receivables. If there is a decrease in Accounts Receivables we add that amount in Income reported on Income Statement for that year. So,

    $498,000 + $17,000

    = $515,000

    Hence, the Cash Flow from Operating Activities would be $515,000, exclusive of the other adjustments.
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