Parmesan Company Uses the Direct Method for Its Statement of Cash

question 81

Multiple Choice

Parmesan Company uses the direct method for its statement of cash flow. It reports the following information regarding the year 2014: From the income statement:
Sales Revenues, $265,000
Cost of Goods Sold, $210,000
Operating expenses, $31,000
From the balance sheet:
$$\begin{array} { | l | r | r | } \hline & \text { Beginning Balance } & \text { Ending Balance } \\\hline \text { Accounts Receivable: } & \$ 14,500 & \$ 17,800 \\\hline \text { Inventory: } & 23,500 & 17,800 \\\hline \text { Accounts Payable: } & 6,000 & 13,500 \\\hline \text { Accrued Liabilities: } & 4,000 & 1,500 \\\hline\end{array}$$ On the statement of cash flows, what amount will be shown for collections from customers?

• A) $261,700
• B) $268,300
• C) $265,000
• D) $32,300

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Definitions:

Parabronchi

Minute tubular air passages within the lungs of birds through which respiratory gas exchange occurs, part of their highly efficient respiratory system.

Birds

Warm-blooded vertebrates characterized by feathers, beaks without teeth, and laying hard-shelled eggs.

Countercurrent Exchange

A mechanism in which fluids flow in opposite directions, exchanging properties (such as heat or chemical constituents) to maximize transfer rates.

Gills

Respiratory organs in certain aquatic organisms, allowing them to extract oxygen from water.