Bay Company Began Using the Allowance Method in 2014

question 54

Multiple Choice

Bay Company began using the allowance method in 2014. On January 1, 2014, Bay had a $3,000 balance in the Accounts Receivable account and a zero balance in the Allowance for Doubtful Accounts account. During 2014, Bay provided $25,000 of service on account. The company collected $21,000 cash from account receivable. Uncollectible accounts are estimated to be 2% of sales on account.
The amount of cash flow from operating activities that would appear on the 2014 statement of cash flows is:

• A) $24,000.
• B) $25,000.
• C) $17,000.
• D) $21,000.

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Definitions:

Cooperative Behaviors

Actions that involve working together in a supportive manner to achieve a common or mutual benefit.

Work Teams

Groups of individuals working collaboratively towards a common goal, leveraging diverse skills and expertise for collective success.

Competitive Behaviors

Actions undertaken by individuals or groups aimed at outperforming others to achieve their objectives, often in a competitive environment or platform.

Positive Competitive

Refers to a situation where competition leads to beneficial outcomes for the participants, encouraging improvement and innovation without detrimental effects.