Dickens Co. reported net income of $58,000 for the year ended December 31, 2022. January 1 balances in accounts receivable and accounts payable were $26,000 and $26,500 respectively. Year-end balances in these accounts were $21,000 and $30,000, respectively. January 1 balances in long-term notes receivable and long-term notes payable were $131,000 and $96,500 respectively. Year-end balances in these accounts were $113,000 and $84,000, respectively. Assuming that all relevant information has been presented, Dickens Co's cash flows from operating activities would be: A $66,500 B $59,500 с $58,000
Bad Debts
At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
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