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25 March, 10:11

Sales on account (all are collectible) amounted to $560,000 during 2019. Accounts receivable were $112,000 on January 1, 2019 and $98,000 on December 31, 2019. How much cash was collected from customers during the year ended December 31, 2019?

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  1. 25 March, 10:38
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    Cash collected from customers = $574,000.

    Explanation:

    The cash collected ca be worked out using the formula below:

    Opening balance of account. receivable + sales on account - Closing balance of account receivable

    Note that addition credit sales increases the amount in the receivable account.

    So we can apply this formula as follows:

    112,000 + 560,000 - 98,000

    = $574,000.

    Cash collected from customers = $574,000.
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