From the following information calculate the cash received from customers. Accounts receivable opening balance $20,000Credit Sales $860,000Accounts receivable closing balance $40,000$880,000.$900,000.$840,000.$820,000.
Question
From the following information calculate the cash received from customers. Accounts receivable opening balance 860,000Accounts receivable closing balance 880,000.840,000.$820,000.
Solution
To calculate the cash received from customers, you need to consider the opening and closing balances of accounts receivable and the credit sales. Here's how:
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Start with the credit sales for the period, which is $860,000.
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Subtract the closing balance of accounts receivable. This is because the closing balance represents the amount of credit sales that have not yet been paid by customers. So, 40,000 = $820,000.
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Add the opening balance of accounts receivable. This is because the opening balance represents the amount of credit sales from the previous period that have been collected during the current period. So, 20,000 = $840,000.
Therefore, the cash received from customers is $840,000.
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