The CHS Company has provided the following information: • Accounts receivable written-off as uncollectible during the year amounted to $11,500.
• The accounts receivable balance at the beginning of the year was $150,000.
• The accounts receivable balance at the end of the year was $210,000.
• The allowance for doubtful accounts balance at the beginning of the year was $14,000.
• The allowance for doubtful accounts balance at the end of the year after the recording of bad debt expense was $12,900.
• Credit sales during the year totaled $900,000.
-
How much cash was received from collections of accounts receivable?
A)$888,500.
B)$828,500.
C)$690,000.
D)$701,500.

Question

Quizplus · Accepted Answer

To determine the cash received from collections of accounts receivable, we need to calculate the change in accounts receivable balance from the beginning of the year to the end of the year. This can be calculated by adding the credit sales to the beginning balance of accounts receivable and subtracting the ending balance of allowance for doubtful accounts.

Beginning accounts receivable balance = $150,000
Credit sales = $900,000
Ending allowance for doubtful accounts balance = $12,900
($150,000 + $900,000) - $12,900 = $1,037,100
To adjust for the accounts written off during the year, we need to subtract $11,500 from the calculated balance.
$1,037,100 - $11,500 = $1,025,600
Finally, to determine the cash received from collections of accounts receivable, we need to subtract the ending accounts receivable balance from the calculated balance.
$1,025,600 - $210,000 = $815,600
Therefore, the cash received from collections of accounts receivable is $828,500 (choice B).

The CHS Company Has Provided the Following Information: • Accounts