The balance in Accounts Receivable was $650,000 at the beginning of the year and $350,000 at the end of the year. Credit sales for the year totaled $4,100,000. During the year, $400,000 in customer accounts were written off. How much cash was collected from customers during the period?

Question

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The cash collected from customers can be calculated using the formula: Beginning Accounts Receivable + Credit Sales - Ending Accounts Receivable - Write-offs = Cash Collected. Plugging in the numbers: $650,000 + $4,100,000 - $350,000 - $400,000 = $4,000,000.

The Balance in Accounts Receivable Was $650,000 at the Beginning