Barney Day Inc. had credit sales of $ 800,000. The beginning accounts receivable balance was $ 40,000 and the ending accounts receivable balance was $ 140,000. What were the cash collections from customers during the period?

Question

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Cash collections can be calculated as: Beginning Accounts Receivable + Credit Sales - Ending Accounts Receivable = Cash Collections. Thus, $40,000 + $800,000 - $140,000 = $700,000.