Could you tell me why they subtract the decrease in Accounts Receivable? I thought a decrease in accounts receivable meant a credit to receivable and a debit to cash which would be an increase in cash but they take 320,000-5,000 making 315,000 as sales revenue.

Stanley and Jones Lawn Service Company (S&J) maintains its books on a cash basis. However, the company recently borrowed $100,000 from a local bank and the bank requires S&J to provide annual financial statements prepared on an accrual basis. During 2018, the following cash flows were recorded: $320,000 Cash collected from customers Cash paid for: Salaries Supplies Rent Insurance Miscellaneous Net operating cash flow $180,000 25,000 12,000 6,000 20,000 243,000 $ 77,000 You are able to determine the following information about accounts receivable, prepaid expenses, and accrued liabilities: Accounts receivable Prepaid insurance Supplies Accrued liabilities (for miscellaneous expenses) January 1, 2018 $32,000 -0- 1,000 2,400 December 31, 2018 $27,000 2,000 1,500 3,400 In addition, you learn that the bank loan was dated September 30, 2018, with principal and interest at 6% due in one year. Depreciation on the company's equipment is $10,000 for the year. Required: Prepare an accrual basis income statement for 2018. (Ignore income taxes.) Income Statement is prepared to find the net income of a concern. To find the net income, the total revenue of the company is matched with its total expenses. Net income is the excess amount of revenue over the total expenses. S and JL Income Statement For the year ended December 31, 2018 Details Amount ($) Amount ($) Reference Revenues: Sales revenue Working 315,000 note 1 Expenses: Salaries expense 180,000 Supplies expense 24,500 Working note 2 Rent 12,000 Insurance expense 4,000 Working note 3 Miscellaneous expense 21,000 Working note 4 Depreciation 10,000 (251,500) Operating Income 63,500 Other expense: Working Interest 1,500 note 5 Net income 62,000