Question

Swifty Corporation has recently decided to go public and has hired you as an independent CPA. One statement that the enterprise is anxious to have prepared is a statement of cash flows. Financial statements of Swifty Corporation for 2019 and 2018 are provided below.

BALANCE SHEETS
						12/31/19					12/31/18
	Cash					$407000					$ 190000
	Accounts receivable					361000					215000
	Inventory					382000					480000
	Property, plant and equipment		$607000					$962000
	Less accumulated depreciation		(321000	)		286000		(305000	)		657000
						$1436000					$1542000
.
	Accounts payable					$ 176000					$ 97000
	Income taxes payable					353000					393000
	Bonds payable					359000					598000
	Common stock					218000					218000
	Retained earnings					330000					236000
						$1436000					$1542000

INCOME STATEMENT For the Year Ended December 31, 2019
	Sales revenue								$8400000
	Cost of sales								7151000
	Gross profit								1249000
	Selling expenses						$600000
	Administrative expenses						193000		793000
	Income from operations								456000
	Interest expense								72000
	Income before taxes								384000
	Income taxes								98000
	Net income								$ 286000

The following additional data were provided:

	1.	Dividends for the year 2019 were $194000.
	2.	During the year, equipment was sold for $242000. This equipment cost $353000 originally and had a book value of $286000 at the time of sale. The loss on sale was incorrectly charged to cost of sales.
	3.	All depreciation expense is in the selling expense category.

Under the direct method, the cash received from customers is

Answer 1

Answer---------

Cash received from customers

$ 8,254,000

Working

Cash received from customers
Sales revenue	$ 8,400,000
Less: Increase in accounts receivable	-$ 146,000
Cash received from customers	$ 8,254,000