Question

A firm has an opening balance of receivables amounting to $10,000. During the year the firm...

A firm has an opening balance of receivables amounting to $10,000. During the year the firm has sales totalling $100,000. It writes off $3,000 in bad debts.

At year-end it is owed $8,000 by customers.

How much cash was received from receivables in the year?

  1. $102,000
  2. $105,000
  3. $95,000
  4. $99,000.

A company has a balance on its payables account of $6,000 at the start of the year. During the year it pays $59,000 and receives a discount amounting to $2,000. At year-end the company owes $7,000. What was the amount of purchases made on credit for the year?

  1. $74,000
  2. $62,000
  3. $60,000
  4. $58,000.
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Answer #1

Answer:

cash was received from receivables in the year is $99000.

purchases made on credit for the year is $62000.

T – Account

Account Receivable

Particulars

Amount

Particulars

Amount

Opening Balance

$10000

Bad debts

$3000

Credit Sale

$100000

Cash Received (Bal. figure)

$99000

Ending Balance

$8000

$110000

$110000

T – Account

Account payable

Particulars

Amount

Particulars

Amount

Cash paid

$59000

Opening Balance

$6000

Discount

$2000

Credit Purchase (Bal. Figure)

$62000

Ending Balance

$7000

$68000

$68000
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