Question

If sales are $680,000 and the beginning and ending balances of Accounts Receivable are $34,400 and...

If sales are $680,000 and the beginning and ending balances of Accounts Receivable are $34,400 and $38,400, respectively, the cash collected from customers is:

Multiple Choice

$680,000.

$641,600.

$676,000.

$684,000.

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Homework Answers

Answer #1
Solution:
Answer is 3rd option: $676,000
Working Notes:
Cash collected from customers = Sales + Beginning Accounts receivable balance - Ending Accounts receivable balance
Cash collected from customers =$680,000 + $34,400 - $38,400
=$676,000
Notes: Cash collection from accounts receivable are cash received from sales & Cash received from accounts receivable
In our case cash is received from sales But account receivable increase from $34,400 to $38,400 , means net increase in accounts receivable.
Please feel free to ask if anything about above solution in comment section of the question.
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