How much cash was received from collections of accounts receivable?

A) $888,500.
B) $828,500.
C) $690,000.
D) $701,500.

Question

How much cash was received from collections of accounts receivable?A) $888,500.B) $828,500.C) $690,000.D) $701,500.

Zunaira AKHTAR · Accepted Answer

Final Answer : B, Explanation :  To determine the cash received from collections of accounts receivable, we need to calculate the change in accounts receivable balance from the beginning of the year to the end of the year. This can be calculated by adding the credit sales to the beginning balance of accounts receivable and subtracting the ending balance of allowance for doubtful accounts.Beginning accounts receivable balance = $150,000Credit sales = $900,000Ending allowance for doubtful accounts balance = $12,900($150,000 + $900,000) - $12,900 = $1,037,100To adjust for the accounts written off during the year, we need to subtract $11,500 from the calculated balance.$1,037,100 - $11,500 = $1,025,600Finally, to determine the cash received from collections of accounts receivable, we need to subtract the ending accounts receivable balance from the calculated balance.$1,025,600 - $210,000 = $815,600Therefore, the cash received from collections of accounts receivable is $828,500 (choice B).

How much cash was received from collections of accounts receivable?

A) $888,500.
B) $828,500.
C) $690,000.
D) $701,500.

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