Skysong Corporation had the following 2025 Income statement. Revenues $103,000 Expenses Net income In 2025, Skysong had the following activity in selected accounts. 66,000 $37,000 Accounts Receivable 21,000 Revenues 103,000 Write-offs Collections 1/1/25 12/31/25 29.100 (a) 900 94,000 Allowance for Doubtful Accounts 1/1/25 1,300 Write-offs 900 Bad debt expense 1,700 12/31/25 2,100 Prepare Skysong's cash flows from operating activities section of the statement of cash flows using the SKYSONG CORPORATION Statement of Cash Flows-Direct Method (Partial)
Bad Debts
At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
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