From the following information calculate the cash received from customers.Accounts receivable opening balance $20,000Credit Sales $840,000Accounts receivable closing balance $40,000
Question
From the following information calculate the cash received from customers.Accounts receivable opening balance 840,000Accounts receivable closing balance $40,000
Solution
To calculate the cash received from customers, you need to follow these steps:
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Start with the total credit sales for the period. In this case, it's $840,000.
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Subtract the closing balance of accounts receivable. This is the amount that customers owe at the end of the period, which has not yet been received. Here, it's $40,000.
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Add the opening balance of accounts receivable. This is the amount that customers owed at the beginning of the period. In this case, it's $20,000.
So, the calculation is:
40,000 (Accounts Receivable Closing Balance) + 820,000
Therefore, the cash received from customers is $820,000.
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