Parmesan Company Uses the Direct Method for Its Statement of Cash

question 88

Multiple Choice

Parmesan Company uses the direct method for its statement of cash flow. It reports the following information regarding the year 2013:
$$\begin{array}{l}\text { From the income statement: }\\\begin{array} { l r } \text { Revenues: } & \$ 240,000 \\\text { Cost of goods sold: } & \$ 190,000 \\\text { Operating expenses: } & \$ 25,000\end{array}\\\begin{array} { c c c } \text { From the balance sheet: } & \text { Beginning balance } & \text { Ending balance } \\\text { Accounts receivable: } & \$ 12,000 & \$ 15,000 \\\text { Inventory: } & \$ 22,000 & \$ 18,000 \\\text { Accounts payable: } & \$ 7,000 & \$ 12,000 \\\text { Accrued liabilities: } & \$ 3,000 & \$ 1,200\end{array}\end{array}$$
-On the statement of cash flows, what amount will be shown for collections from customers?

• A) $237,000
• B) $243,000
• C) $240,000
• D) $50,000

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Definitions:

Purchase

The act of buying goods or services, involving a transaction between a buyer and a seller.

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Internet-enabled tools and systems that allow users to perform tasks, exchange information, and access services online.

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A series of steps that a sales team takes to move a customer from potential prospect to buyer, often including stages such as outreach, discovery, negotiation, and closing.