The ending balance of accounts receivable was $74,000. Sales, adjusted to a cash basis using the direct method on the statement of cash flows, were $359,000. Sales reported on the income statement were $385,500. Based on this information, the beginning balance in accounts receivable was:

Question

Allie

Business

29 June, 06:07

The ending balance of accounts receivable was $74,000. Sales, adjusted to a cash basis using the direct method on the statement of cash flows, were $359,000. Sales reported on the income statement were $385,500. Based on this information, the beginning balance in accounts receivable was:

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Alia Gallegos · Answer 1

The beginning balance in accounts receivable was: $47,500

Explanation:

Sales reported on the income statement were $385,500, Accounts receivable increased of $385,500 during the period.

Sales, adjusted to a cash basis using the direct method on the statement of cash flows, were $359,000. The company collected $359,000 from the sales. Accounts receivable decreased of $359,000 during the period.

The beginning balance in accounts receivable = The ending balance of accounts receivable + Accounts receivable decreased during the period - Accounts receivable increased during the period = $74,000 + $359,000 - $385,500 = $47,500