Cash collected from customers during the year ended December 31, 2019 amounted to $314,000, and accounts receivable decreased by $42,000 during the year. How much were sales on account for the year ended December 31, 2019? (Assume that no cash sales were made during the year and that all sales on account are collectible.)

Solution:

Given,

The sums of consumer cash earned during the year ending December 31, 2019 were $314,000 and accounts receivable were lowered by $42,000.

Sales on account for the year ended December 31, 2019:

Credit sales = Cash collected + Increase / (Decrease) of accounts receivable

Credit sales = $ 314,000 - $ 42,000

Credit sales = $ 272,000