Question

Tropical Tours reported revenue of &403,000 for its year ended December 31, 2016. Accounts receivable at December 31, 2015 and 2016, were $35, 300 and $30, 700, respectively. Using the direct method for reporting cash flows from operating activities. Tropical Tours would report cash collected from customers of. a. $407, 600. b. $398, 400. c. $438, 300. d. $403,000.

Answer 1

Answer:

a. $407,600

Explanation:

The Cash collected from customer during the year ended December 31, 2016 shall be  determined through the following mentioned equation:

Cash collected from customer=Revenue reported for the year+Accounts receivable balance as at December 31,2015-Accounts receivable as at December 31,2016

Cash collected from customer=$403,000+$35, 300-$30,700

                                                    =$407,600

So based on the above calculations, the answer shall be a. $407,600