A company reported sales revenue,all of which arose from credit sales,of $48,000 on the income statement.Balance sheet information includes the following: How much cash was collected from customers during the year?

Question

A company reported sales revenue,all of which arose from credit sales,of $48,000 on the income statement.Balance sheet information includes the following:  How much cash was collected from customers during the year?

Quizplus · Accepted Answer

Cash received from customers = Cash collected on account + Payments in advance
Ending Accounts Receivable = Beginning Accounts Receivable + Sales on account − Cash collected on account
Cash collected on account = Beginning Accounts Receivable + Sales on account − Ending Accounts Receivable
= $5,400 + $48,000 − $960 = $52,440
Ending Deferred Revenue = Beginning Deferred Revenue + Payments in advance − Related services provided to customers
Payments in advance = Ending Deferred Revenue − Related services provided to customers − Beginning Deferred Revenue
= $9,300 − $0 (since all sales were on account)− $0 = $9,300
Cash received from customers = Cash collected on account + Payments in advance
= $52,440 + $9,300 = $61,740

A Company Reported Sales Revenue,all of Which Arose from Credit