Given the following information for Rat Rack Corporation: cost of goods sold $35,500, sales $65,000, increase in accounts receivables $4,200. Their receipts from customers total would be:

Question

Quizplus · Accepted Answer

The receipts from customers can be calculated by adding the sales to the increase in accounts receivables, then subtracting the cost of goods sold. So, $65,000 (sales) - $35,500 (cost of goods sold) + $4,200 (increase in accounts receivables) = $33,700 + $4,200 = $37,900. However, the correct calculation should actually be $65,000 (sales) + $4,200 (increase in accounts receivables) = $69,200, indicating an error in my initial explanation. The correct receipts from customers would be based on the formula: Sales - Increase in Accounts Receivables = Receipts from Customers, which seems to have been misapplied. Correctly, it should be Sales + Increase in Accounts Receivables = Receipts from Customers if we were adjusting for an increase in receivables affecting cash receipts, but given the options and the calculation mistake, none align directly with the correct formula or outcome. The correct approach to find receipts from customers would typically involve adjusting sales by changes in accounts receivable, but the provided answer choices and calculations do not align with the standard approach, indicating a mistake in the explanation process.

Given the Following Information for Rat Rack Corporation: Cost of Goods