Question

X Company is a service company and prepares monthly financial statements. In March, it billed customers $412,000 for services it provided; In April, it billed customers $359,000 for services it provided.

In April, the company received $286,000 from its March customers and $261,000 from its April costumers.

Which of the following amounts will appear on X Company's April Income Statement of Cash Inflows?

a. Income statement, $547,000; statement of cash flows $771,000

b. Income statement $359,000; statement of cash flows $547,000

c. Income statement $771,000; statement of cash flows $547,000

d. Income statement $547,000; statement of cash flows $359,000

e. both statements $359,000

f. both statements $261,000

Answer 1

Answer : Income Statement $359,000 Statement of Cash flows $547,000

Explanation:

Income Statement records the Revenues and Expenses during a specific period

Statement of Cashh flow record the Cash receipts and cash payments made during the period

Here,

Revenue in April = $359,000 , Therefore $359,000 has to be reported in Income Statement

Cash received in April = $286,000 + $261,000 = $547,000. Therefore $547,000 has to be reported in Statement of Cash flows