Question

The balance in accounts receivable at the beginning of 2016 was $600. During 2016, $3,200 of credit sales were recorded. If the ending balance in accounts receivable was $500 and $200 in accounts receivable were written off during the year, the amount of cash collected from customers was
$2,700.

$3,120.

$3,320.

$3,400.

Answer 1

Answer:

$3,100

Explanation:

Step 1: Draw up the Accounts Receivable Account

Opening Balance  $600          Allowance for Doubtful debt   $200

Sales                       $3,200       Cash Collected                        $3,100

                                                   Closing Balance                       $500

                                $3,800                                                         $3,800    

To calculate the cash collected from customers

first, add the debit side of the accounts receivable which is a sum of the opening balance and sales= 3,800

Secondly, add the figures in the credit side including allowance for doubtful debt and closing balance= $700

Thirdly, Subtract the lesser side from the greater, $3,800 - $700 = $3,100

$3,100 was cash collected from the customers in 2016