Question

C Corporation reported accounts receivable balance 600 at the beginning of the year and 850 at the end of the year. Allowance for bad debts was 20 at the beginning of the year and 25 at the end of the year. Sales revenues were $1,900 and bad debt expense was $28 for the year. Net income for the year was $500. How much cash was collected from customers on account

Answer 1

Answer: $1,627

Explanation:

Cash collected from customers on account is:

= Beginning accounts receivable + Sales - Ending accounts receivable - Bad debt written off

Bad debt written off = Beginning allowance + Bad debt expense for the year - ending allowance

= 20 + 28 - 25

= $23

Cash collected:

= 600 + 1,900 - 850 - 23

= $1,627