Question

Item 1Item 1 A company's 2019 income statement reported total sales revenue of $1,200,000; accounts receivable increased by $25,000 and the unearned sales revenue account decreased $15,000 during 2019. How much cash was collected from customers during 2019?

Answer 1

Answer:

$1,160,000.00

Explanation:

The amount of cash received during the year is the total sales revenue minus the increase in accounts receivable which is the credit sales upon which payment was not received as well as the decrease in unearned sales revenue which is the sales revenue recorded in the year but its  cash was received in the prior year.

Amount of cash received during the year=$1,200,000-$25,000-$15,000=

$ 1,160,000.00  

The decrease in unearned sales revenue would a debit to unearned sales revenue and a credit to sales revenue, hence it has increased sales revenue