Hamilton Company reported an increase of $370,000 in its accounts receivable during the year 2015.The company's statement of cash flows for 2015 reported $1 million of cash received from customers.What amount of net sales must Hamilton have recorded in 2015?
A)$630,000.
B)$1,370,000.
C)$1,000,000.
D)$370,000.

Question

Quizplus · Accepted Answer

The increase in accounts receivable during the year represents the portion of the sales that were made on credit, which is not yet collected in cash. Therefore, the net sales figure can be calculated as follows:

Net sales = Cash received + Increase in accounts receivable
Net sales = $1 million + $370,000
Net sales = $1,370,000

Thus, the option B is the correct answer.

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