Question

Sales on account are $200,000. Cash sales during the period are $50,000. Beginning accounts receivable is $20,000, and ending accounts receivable is $30,000. What is the total cash collected from customers during the period?

Answer 1

$60,000

Step-by-step explanation:

Financial Statements depicts the financial position of a firm at a particular point of time or specified date. The users of financial statements use various types of analysis to understand or compare the current financial statements of the company to prior years or with those of the competitors.

Given:

Cash sales = $50,000

Beginning accounts receivable = $20,000

Ending accounts receivable = $30,000

Now,

If Beginning accounts receivable > Ending accounts receivable, then there is a decrease in accounts receivable

If Beginning accounts receivable < Ending accounts receivable, then there is a increase in accounts receivable

Here, the accounts receivable increased over the period.

Increase in accounts receivable = Ending accounts receivable - Beginning accounts receivable

Increase in accounts receivable = $30,000 - $20,000

Increase in accounts receivable = $10,000

Now,

Cash collected from customers = Cash sales -- Increase in accounts receivable

Cash collected from customers = $50,000 + $10,000

Cash collected from customers = $60,000