Byfort Company reports the following in its financial statements:
$$\begin{array} { | l | c | c | }
\hline & \underline { 2005 } & \underline { 2006 } \
\hline \text { Accounts receivable, net } & \$ 34,289 & \$ 29,678 \
\hline \text { Net sales* } & \$ 360,007 & \$ 450,000 \
\hline
\end{array}$$
*All sales are on credit.
-How much did the company collect in cash from customers during 2006?
A)$445,389
B)$454,611
C)$484,289
D)$488,900

Question

Byfort Company reports the following in its financial statements:
$$\begin{array} { | l | c | c | } 
\hline & \underline { 2005 } & \underline { 2006 } \
\hline \text { Accounts receivable, net } & \$ 34,289 & \$ 29,678 \
\hline \text { Net sales* } & \$ 360,007 & \$ 450,000 \
\hline
\end{array}$$
*All sales are on credit. 
-How much did the company collect in cash from customers during 2006?
A)$445,389
B)$454,611
C)$484,289
D)$488,900

Quizplus · Accepted Answer

To calculate the cash collected from customers during 2006, we use the formula: Cash Collected = Beginning Accounts Receivable + Credit Sales - Ending Accounts Receivable. For 2006, this is \$34,289 (beginning AR for 2006, which is the ending AR for 2005) + \$450,000 (credit sales for 2006) - \$29,678 (ending AR for 2006) = \$454,611.

Byfort Company Reports the Following in Its Financial Statements *All Sales Are on Credit