Question

Malibu Company went into business in 2019 and in that year, its total sales were $62,000. At the end of 2019, Malibu had a balance in accounts receivable of $4,000 and a balance in unearned revenue of $1,000. How much did Malibu receive in cash during 2019?a. $62,000 b. $59.000 c. $65,000 d. $558.000

Answer 1

Option (b) is correct.

Step-by-step explanation:

Given that,

Total sales = $62,000

At the end of 2019,

Balance in accounts receivable = $4,000

Balance in unearned revenue = $1,000

Malibu receive in cash during 2019:

= (Total Sales - Accounts receivable balance) + Balance in unearned revenue

= ($62,000 - $4,000) + $1,000

= $58,000 + $1,000

= $59,000

Therefore, the cash received by Malibu is $59,000.