Question

The balance in Accounts Receivable at the beginning of the year was $ 550 comma 000. The balance in Accounts Receivable at the end of the year was $ 750 comma 000. Customer accounts of $ 460 comma 000 were written off. The company collected $ 4 comma 060 comma 000 from credit customers and $ 1 comma 090 comma 000 from cash customers. What are credit sales for the​ year?

Answer 1

Answer:

$3,400,000

Explanation:

The computation of the credit sales is shown below:

As we know that

Closing balance of  accounts receivables = Opening balance of  accounts receivables + Credit Sales - Bad debts written off - Cash collected from credit customers

$750,000 = $550,000 + credit sales - $460,000 - $4,060,000

$750,000 = $4,150,000 + credit sales

So, the credit sales is

= $4,150,000 - $750,000

= $3,400,000

Simply we applied the above formula