Vargas Inc

question 39

Essay

Vargas Inc. had the following information related to last year's sales:
Required: Compute the amount that would be reported as "cash collections from customers" on the statement of cash flows using the direct method.

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Definitions:

Fair Value

The revenue expected from an asset sale or the cost to offload a liability in a transaction with market players on the date it is appraised.

Residual Income

Income that remains after all operating expenses and costs of capital have been deducted.

Consolidated Net Income

The total net income of a parent company and its subsidiaries after eliminating intercompany transactions and distributions to noncontrolling interests.

Controlling Interest

Owning a sufficient portion of equity in a company to control its management and operations through voting rights or stock ownership.