Question

Altoon Manufacturing's records were partially destroyed in a flood. The company does not know what sales have been for the year, but it does know all sales were on account. Also, the beginning accounts receivable balance was $19,000, and its accounts receivable balance at the time of the flood was $25,000. From the beginning of the year until the flood, cash collections from credit customers were $158,000. Given this information, what are Altoon Manufacturing's sales for the year until the flood?
a. $164,000
b. $114,000
c. $202,000
d. $209,000
e. $189,000

Answer 1

Answer:

a. $164,000

Explanation:

The computation of the Altoon Manufacturing's sales for the year until the flood is given below:

= Cash collections + ending receivables - opening receivables

= $158,000 + $25,000 - $19,000

= $164,000

hence, the Altoon Manufacturing's sales for the year until the flood is $164,000

Therefore the first option is correct