Question

On January 1, 2017, the Accounts Receivable of Linda, Inc. had a debit balance of $180,000. During January, the company provided services for $700,000 on account. The company collected $330,000 from its customers on account in January. What was the ending balance in the Accounts Receivable account at the end of January?

A. $880,000
B. $370,000
C. $650,000
D. $550,000
E. None of the above

Answer 1

The ending balance in the Accounts Receivable account at the end of January is $880,000.

Step-by-step explanation:

To determine the ending balance in the Accounts Receivable account at the end of January, we need to consider the beginning balance, the services provided on account, and the collections from customers. The beginning balance of Accounts Receivable is $180,000. The services provided on account have a total amount of $700,000, which increases the balance. The collections from customers amount to $330,000, which decreases the balance. To calculate the ending balance, we add the beginning balance to the services provided on account and subtract the collections from customers:Ending balance = beginning balance + services provided on account - collections from customers

Ending balance = $180,000 + $700,000 - $330,000

Ending balance = $880,000

Therefore, the correct answer is A. $880,000.