Sage Hill Company's accounts receivable arising from sales to customers amounted to $138000 and $121000 at the beginning and end of the year, respectively. Income reported on the income statement for the year was $526000. Exclusive of the effect of other adjustments, the cash flows from operating activities to be reported on the statement of cash flows is:

$509000.

$526000.

$543000.

$647000.

Question

Business

Finn

17 October, 06:06

Sage Hill Company's accounts receivable arising from sales to customers amounted to $138000 and $121000 at the beginning and end of the year, respectively. Income reported on the income statement for the year was $526000. Exclusive of the effect of other adjustments, the cash flows from operating activities to be reported on the statement of cash flows is:

$509000.

$526000.

$543000.

$647000.

+1

Answers (1)

Know the Answer?

Saunders · Answer 1

Option C - $543,000 is the correct option.

Explanation:

Using the direct method:

Cash from operating activities = Revenue + Decrease in trade receiables

= $526,000 + ($138,000 - $121,000) = $526,000 + $17,000 = $543,000

So this is the amount that would be reported in Statement of cash flow under operating activities.