Question

During a certain year, the Hotel Victoria had cash cash sales of $800,000 and sales on account of $2,540,000. During the same year, the Accounts Receivable (hotel guests) increased by $10,000. Consequently, the cash received from hotel guests during the certain year was equal to:

Answer 1

The cash received from hotel guests during the year was $3,330,000, calculated by adding cash sales of $800,000 to the sales on account after adjusting for the increase in Accounts Receivable, which was $2,530,000 (from $2,540,000 minus the $10,000 increase).

Step-by-step explanation:

To calculate the cash received from hotel guests during the year, we need to consider both cash sales and the net change in Accounts Receivable (which includes sales on account). The hotel had cash sales of $800,000. Additionally, there were sales on account amounting to $2,540,000, and Accounts Receivable increased by $10,000, which implies that not all sales on account were collected in cash.

To find the total cash received from guests, we subtract the increase in Accounts Receivable from the sales on account and then add the cash sales:

Sales on account: $2,540,000
Increase in Accounts Receivable: $10,000
Cash sales: $800,000

Thus, cash received from sales on account is:

$2,540,000 - $10,000 = $2,530,000

Adding the cash sales, the total cash received from hotel guests is:

$2,530,000 (cash from sales on account) + $800,000 (cash sales) = $3,330,000

The cash received from hotel guests during that year was $3,330,000.