For the month of May 2020, Ceres Corporation, which uses the direct write-off method in accounting for uncollectible accounts receivable, has the following information: Cash sales $40,000 Cash received on accounts receivable $32,000 Accounts receivable, May 1, 2020 $105,000 Accounts receivable, May 31, 2020 $92,000 Accounts receivable written off as uncollectible $2,000 What are the gross sales for May 2020

Question

Fred

Business

23 February, 14:40

For the month of May 2020, Ceres Corporation, which uses the direct write-off method in accounting for uncollectible accounts receivable, has the following information: Cash sales $40,000 Cash received on accounts receivable $32,000 Accounts receivable, May 1, 2020 $105,000 Accounts receivable, May 31, 2020 $92,000 Accounts receivable written off as uncollectible $2,000 What are the gross sales for May 2020

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Paul Mendez · Answer 1

Answer and Explanation:

$61,000 = 40000+32000-13000+2000

Find the difference between the beginning and ending accounts receivable.

$105,000 - $92,000 = $13,000

Subtract this from the cash received on accounts receivable to find the amount of credit sales.

$32,000 - $13,000 = $19,000

Add this to the cash sales.

$19,000 + $40,000 = $59,000

Adjust for the direct write offs.

$59,000 + $2,000 = $61,000