Question

Allen Company began the year with a $28,000 balance in its accounts receivable account. At the end of the period, this balance had increased to $30,000. During the period, Allen Company wrote off one customer’s account in the amount of $5,000. Sales during the year were $400,000 and sales discounts were $4,000. Assuming these are the only activities affecting this account during the year, what was the total cash collected from customers? Using a T-account may help.

Answer 1

Beginning Accounts receivables balance	$28,000
Sales	$40,000
Sales Discounts	($4,000)
		$64,000
Less:
Written off	$5,000
Ending balance of accounts receivables	$30,000
		$35,000
Total Cash collected		$29,000	Answer

--Working

Accounts receivables
Beg Bal	$28,000	$4,000	Sales discount
Sales	$40,000	$5,000	Written off
		$29,000	Cash collected
End Bal	$30,000