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20 May, 14:04

g The balance in Accounts Receivable at the beginning of the year amounted to $16,000. During the year, $64,000 of credit sales were made to customers. If the ending balance in Accounts Receivable amounted to $10,000, and uncollectible accounts expense amounted to $4,000, what is the amount of cash inflow from customers that would appear in the operating activities section of the cash flow statement

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  1. 20 May, 16:50
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    the amount of cash inflow from customers that would appear in the operating activities section of the cash flow statement is $66,000

    Explanation:

    The cash inflow from customers is presented on the face of Cash Flow Statement using the Direct Method.

    Cash inflow from customers is calculated by opening a Total Accounts Receivables - T Account as follows:

    Debits:

    Beginning Balance $16,000

    Sales $64,000

    Totals $80,000

    Credits:

    Uncollectible Expense $4,000

    Closing Balance $10,000

    Cash (Balancing figure) $66,000

    Totals $80,000

    The Balancing figure represents the cash payment received from customers.
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