Hamilton Company reported an increase of $370,000 in its accounts receivable during the year 2018.The company's statement of cash flows for 2018 reported $1 million of cash received from customers.What amount of net sales must Hamilton have recorded in 2018?
A)$ 630,000
B)$1,370,000
C)$1,000,000
D)$ 370,000

Question

Quizplus · Accepted Answer

The increase in accounts receivable during 2018 is $370,000, which means that the company must have made $370,000 in credit sales during that period.

To find the net sales for the year, we need to add the cash received from customers to the credit sales.

Net Sales = Cash Received + Increase in Accounts Receivable
Net Sales = $1,000,000 + $370,000
Net Sales = $1,370,000

Therefore, the correct answer is B.

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