Parks Company reported an increase of $370,000 in its accounts receivable during the year 2016.The company's statement of cash flows for 2016 reported $1 million of cash received from customers.What amount of net sales must Parks have recorded in 2016?

Question

Quizplus · Accepted Answer

The increase in accounts receivable of $370,000 represents sales that were made in 2016 but not yet collected. Therefore, the cash received from customers of $1 million includes a portion of these sales, as well as any other collections from previous years. To calculate net sales for the year, we need to add the increase in accounts receivable to the cash received, giving a total of $1,370,000.

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