On January 1, Year 2, Grande Company had a $21,000 balance in the Accounts Receivable account and a zero balance in the Allowance for Doubtful Accounts account. During Year 2, Grande provided $78,000 of service on account. The company collected $74,500 cash from accounts receivable. Uncollectible accounts are estimated to be 2% of sales on account.What is the amount of cash flow from operating activities that would appear on the Year 2 statement of cash flows?**Multiple Choice:**- $57,420- $78,000- $74,500- $73,010

Answered: Image /qna-images/answer/e8ba9fcc-a27a-4fa2-9c5a-09863b5215ae.jpg

Answered: On January 1, Year 2 Grande Company had…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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None
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Ultra Day Spa provided $89,900 of services during Year 1. All customers paid for the services with credit cards. Ultra submitted the credit card receipts to the credit card company immediately. The credit card company paid Ultra cash in the amount of face value less a 2 percent service charge. Required a. Show the credit card sales (Event 1) and the subsequent collection of accounts receivable (Event 2) in a horizontal statements model. In the Statement of Cash Flows column, indicate whether the item is an operating activity (OA), investing activity (IA), or financing activity (FA). Leave blank to indicate that an element is not affected by the event. b. Based on this information alone, answer the following questions: (1) What is the amount of total assets at the end of the accounting period? (2) What is the amount of revenue reported on the income statement? (3) What is the amount of cash flow from operating activities reported on the statement of cash flows?
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At the beginning of Year 3 Omega Company had a $75,000 balance in its accounts receivable account and a $10,400 balance in allowance for doubtful accounts. During Year 3 Omega experienced the following events. (1) Earned $256,000 of revenue on account. (2) Collected $248,000 cash from accounts receivable. (3) Wrote off $8,500 of accounts receivable as uncollectible. Omega estimates uncollectible accounts to be 4% of receivables. The December 31, Year 3 ending balance in the allowance for doubtful accounts account (balance after expense recognition) is: Multiple Choice $2,980. $8,500. $2,660. $3,300.
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