Question

On January 1, 2015, 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 $230,000 from its customers on account in January. What was the ending balance in the Accounts Receivable account at the end of January?

A) $470,000
B) $880,000
C) $650,000
D) $700,000

Answer 1

C

Step-by-step explanation:

Here, we are asked to calculate the ending balance in the accounts receivable account at the end of January.

To calculate this, we employ a mathematical approach;

Mathematically;

The closing balance in account receivables = opening balance + services performed on account - cash received during month

From the question, we identify the following;

The opening balance in accounts receivable = $180,000

Services performed on account = $700,000

cash received = $230,000

we input these values into the equation;

Closing balance = 180,000 + 700,000 - 230,000 = $650,000