Beth Company reported sales on account of $250,000,an increase in inventory of $70,000,and a decrease in accounts receivable of $20,000.How much cash was collected from customers?

Question

Quizplus · Accepted Answer

The formula to calculate cash collected from customers is: 
Cash collected from customers = Sales on account - Decrease in accounts receivable.
Substituting the given values, we get: 
Cash collected from customers = $250,000 - (-$20,000) = $270,000
(Note: Decrease in accounts receivable is taken as a negative value as it implies a reduction in the amount receivable from customers, which is a source of cash inflow).

Beth Company Reported Sales on Account of $250,000,an Increase in Inventory