Question

Cruz trading's beginning and ending balance accounts receivable for the year were $30,000 and $200,000 respectively, while the credit sales were $825,000. calculate the cash collections from customers for the year.

Answer 1

The answer is "$655,000".

Beginning balance = $30,000
Ending Balance = $200,000
Credit sales = $825,000

Cash collections from customers for the year = credit sales - (ending balance - beginning balance)

= $825,000 - ($200,000 - $30,000)
= $825,000 - $170000
= $655,000