Question

The ending balance of accounts receivable was $74,000. Sales, adjusted to a cash basis using the direct method on the statement of cash flows, were $359,000. Sales reported on the income statement were $385,500. Based on this information, the beginning balance in accounts receivable was:

Answer 1

Answer:

The beginning balance in accounts receivable was: $47,500

Explanation:

Sales reported on the income statement were $385,500, Accounts receivable increased of $385,500 during the period.

Sales, adjusted to a cash basis using the direct method on the statement of cash flows, were $359,000. The company collected $359,000 from the sales. Accounts receivable decreased of $359,000 during the period.

The beginning balance in accounts receivable = The ending balance of accounts receivable + Accounts receivable decreased during the period - Accounts receivable increased during the period = $74,000 + $359,000 - $385,500 = $47,500