During 20X2, its second year in operation, Banner Company delivered goods to customers for which customers paid or promised to pay $5,850,000. Assume all sales were on account and the amount of cash collected from customers was $5,960,000. The amount of trade receivables at the beginning of 20X2 was $1,200,000. Based on this information, what is the amount of trade receivables that Banner would report at the end of 20X2?

Question

Quizplus · Accepted Answer

The amount of trade receivables at the end of 20X2 can be calculated as follows: Beginning trade receivables + Sales on account - Cash collected = Ending trade receivables. Therefore, $1,200,000 + $5,850,000 - $5,960,000 = $1,090,000.

During 20X2, Its Second Year in Operation, Banner Company Delivered