Question

Jay Company started Year 2 with a beginning balance of $10,000 in accounts receivable. During the year, revenue on account amounted to $25,000. Cash collections of accounts receivable amounted to $5,000. Expenses for the period were $2,100. The company paid dividends of $450. Based on this information alone, what is the ending balance in accounts receivable for Year 2?

Answer 1

Answer:

The answer is $30,000

Explanation:

Accounts Receivable is the amount a firm or company is expecting from its debtors or it is the amount of goods sold on credit.

Cash collected on accounts receivable reduces the receivables.

Ending balance in accounts receivable = beginning balance + revenue + cash collected from accounts receivable.

Beginning balance = $10,000

Revenue = $25,000

Cash collected = $5,000

Therefore, Ending balance in accounts receivable is:

$10,000 + $25,000 - $5,000

=$30,000