Parks Company reported an increase of $370,000 in its accounts receivable during the year 2015.The company's statement of cash flows for 2015 reported $1 million of cash received from customers.What amount of net sales must Parks have recorded in 2015?

Question

Quizplus · Accepted Answer

The increase in accounts receivable represents sales that were made on credit, but not yet collected in cash. Thus, the net sales for the year would be the cash received ($1 million) plus the increase in accounts receivable ($370,000), which equals $1,370,000.

Parks Company Reported an Increase of $370,000 in Its Accounts