Wellington, Inc uses the direct method to prepare its statement of cash flows

Question

Refer to the following financial statement information for the year ended December 31, 2017:

Wellington, Inc
Comparative Balance Sheet
December 31, 2017 and 2016
2017 2016 Increase
(Decrease)
Cash $33,700 $18,500 $15,200
Accounts Receivable 27,100 29,300 2,200
Merchandise Inventory 57,200 30,200 27,000
PP&E, net 126,000 92,000 34,000
Total Assets $244,000 $170,000 $74,000

Accounts Payable 8,000 12,000 $(4,000 )
Accrued Liabilities 5,500 1,500 4,000
Long-term Notes Payable 72,500 81,500 $(9,000 )
Total Liabilities $86,000 $95,000 $(9,000 )

Common Stock $55,000 $3,000 $52,000
Retained Earnings 115,000 78,000 37,000
Treasury Stock (12,000 ) (6,000 ) (6,000 )
Total Stockholders' Equity $158,000 $75,000 $83,000

Total Liabilities and Stockholders' Equity $244,000 $170,000 $74,000

Wellington, Inc
Income Statement
December 31, 2017
2017 2016 Increase
(Decrease)
Sales Revenue $289,600
Interest Revenue 2,700
Gain on Sale of Plant Assets 6,000
Total Revenues and Gains $298,300
Cost of Goods Sold 145,000
Salaries and Wages Expense 49,700
Depreciation Expense-Plant Assets 16,000
Other Operating Expense 24,300
Interest Expense 3,500
Income Tax Expense 7,800
Total Expenses 246,300
Net Income $52,000

A) $287,400
B) $294,500
C) $260,300
D) $296,100

Answer 1

B .B)
Accounts Receivable beginning balance $29,300
Add: Sales Revenue 289,600
Add: Interest Revenue 2,700
Less: Accounts Receivable, ending balance (27,100 )
Total cash receipts $294,500