Question

At December 1, 2017, Oreo Company's accounts receivable balance was $5,600. During December, Oreo had credit sales of $15,000 and collected accounts receivable of $12,000. At December 31, 2017, the accounts receivable balance is

a. $5,600 debit
b. $8,600 debit
c. $20,600 debit
d. $8,600 credit

Answer 1

The accounts receivable balance for Oreo Company at December 31, 2017, is calculated by adding the credit sales to the opening balance and subtracting the collected receivables, resulting in an ending balance of $8,600 debit.

Step-by-step explanation:

To calculate the accounts receivable balance for Oreo Company at the end of December, we need to consider the opening balance, credit sales, and the amount collected. The opening balance on December 1, 2017, was $5,600. We add the credit sales of $15,000 to the opening balance, resulting in $20,600. Then, we subtract the collected receivables of $12,000 from this total. This calculation gives us the closing balance of accounts receivable at December 31, 2017.

The calculation is as follows:

$5,600 (opening balance) + $15,000 (credit sales) = $20,600 - $12,000 (collected receivables) = $8,600 debit.

Therefore, the answer is (b) $8,600 debit.