Ellis Inc. had cash sales of $300,000 and credit sales of $500,000. The accounts receivable balance increased $10,000 during the year. How much cash did Ellis receive from its customers during the year?

Question

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Ellis Inc. received $790,000 from its customers during the year. This is calculated by adding the cash sales of $300,000 to the credit sales of $500,000, then subtracting the $10,000 increase in accounts receivable (since this increase indicates that not all credit sales were collected in cash). Thus, $300,000 + $500,000 - $10,000 = $790,000.

Ellis Inc Had Cash Sales of $300,000 and Credit Sales of of $500,000