Answer:
The answer is : $104,000
Explanation:
First, we have to lay out the particulars, and explain what each of them mean:
debit balance in account receivable = $32,000. This refers to an amount that cusomers owed the company at the beginning of the period.
revenue recorded = $88,000. This refers to the total sales made by the company.
At the end of the period, we are told that the account receivable contained a balance of $16,000
Therefore it means that after all the payments (both balance from previous period and sales transactions) have been made in cash, the amount which the customers owed the company = $16,000.
Hence the cash collected is calculated as follows
(debit balance at beginning + revenue) - debit balance at the end = cash collected
(32,000 + 88,000) - 16,000 = cash collected
120,000 - 16,000 = cash collected
cash collected = $104,000
