Lantern Company reported sales of $200,000,an increase in accounts receivable of $5,000,and a decrease in cash of $20,000.How much cash was collected from customers?
A) $185,000
B) $195,000
C) $200,000
D) $220,000

Question

Quizplus · Accepted Answer

To find out the cash collected from customers, we need to adjust for the increase in accounts receivable. Accounts receivable went up by $5,000, so the company must have made sales of $205,000 ($200,000 + $5,000) during the period. Since cash decreased by $20,000, the company must have collected $185,000 ($205,000 - $20,000) in cash from customers. Therefore, the correct answer is B) $195,000.

Lantern Company Reported Sales of $200,000,an Increase in Accounts Receivable