Question

During 2019, its second year in operation, Sanborn Company delivered goods to customers equal to $6,250,000. The amount of cash collected from customers was $6,360,000. The amount of accounts receivable at the beginning of 2019 was $1,200,000. Based on this information, what is the amount of accounts receivable that Sanborn should report at the end of 2019

Answer 1

Accounts receivable to be reported at the end of 2019 = $1090000

Step-by-step explanation:

Assuming that all sales are made on credit.

The opening accounts receivable were = $ 1200000

We add the credit sales made during the year to the opening balance of accounts receivable to reach at total accounts receivable.

Total accounts receivable = 1200000 + 6250000 = 7450000

We deduct the amount received from customers against these sales to reach at the closing balance for accounts receivables.

Closing balance Accounts receivables 2019 = 7450000 - 6360000 = $1090000