Osco Ltd Uses the Allowance Method of Accounting for Bad

Multiple Choice

Osco Ltd uses the allowance method of accounting for bad and doubtful debts. Bad and doubtful debts expense shown in the income statement is $10 000 and the amount of bad debts actually written off is $8 000. If sales are $220 000 and accounts receivable have increased by $12 000 over the period, the amount to be shown in the statement of cash flows for receipts from customers is:

A) $200 000
B) $210 000
C) $220 000
D) $240 000