Question

the wd co. reported revenue of $23,402 million for 20x3. their trade receivables balance was $3,999 million in 20x3 and $3,633 million in 20x2. how much cash was collected from customers?

Answer 1

The WD Co. collected $23,036 million in cash from customers in 20X3, after adjusting their reported sales revenue by the change in trade receivables from the previous year.

Step-by-step explanation:

The student's question pertains to calculating the amount of cash collected from customers by the WD Co. when given the company's revenue and trade receivables balance for two consecutive years. To calculate this, we need to adjust the reported revenue for the change in trade receivables from one year to the next. The formula to calculate cash collected from customers in this context is:

Cash Collected from Customers = Sales Revenue + Beginning Receivables - Ending Receivables

The beginning receivables for 20X3 would be the ending receivables for 20X2, which is $3,633 million. The ending receivables for 20X3 is $3,999 million. Therefore:

Cash Collected from Customers = $23,402 million + $3,633 million - $3,999 million

Cash Collected from Customers = $23,402 million + $3,633 million - $3,999 million = $23,036 million