For each of the following items, calculate the amount of revenue or expense that should be recognized on the income statement for Pelkey Co. for the year ended December 31, 2019: Cash collected from customers during the year amounted to $147,000, and accounts receivable increased by $31,000. How much were sales on account for the year ended December 31, 2019?

Question

Pollard

Business

17 August, 13:47

For each of the following items, calculate the amount of revenue or expense that should be recognized on the income statement for Pelkey Co. for the year ended December 31, 2019: Cash collected from customers during the year amounted to $147,000, and accounts receivable increased by $31,000. How much were sales on account for the year ended December 31, 2019?

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Alice Moses · Answer 1

Total sales on account = $178,000

Explanation:

We have to determine Accounts receivable balance to determine how much sales on account during the year ended on December 31, 2019.

Cash collection from customers during the year (Accounts receivable decrease) = $147,000

Add: Accounts receivable increase due to sales on account = $31,000

Therefore, Total sales on account = $178,000

It means Pelkey company sold $178,000 on account while collecting $147,000 from customers during the year.