Question

St. Pierre Enterprises reported the following information in its financial statements: Amounts are as of or for the year ended Prior Year Current Year Inventory $ 55,000 $ 80,000 Accounts Receivable 68,000 103,000 Accounts Payable 34,500 40,000 Sales Revenue 305,000 375,000 Cost of Goods Sold 203,000 250,000 What is the amount of cash collected from customers during the current year?

Answer 1

Answer:

St. Pierre Enterprises

Computation of Cash Collected from Customers:

Cash collected from customers     $340,000

Explanation:

A) Accounts Receivable

Beginning Balance    $68,000

Sales                          375,000

less ending balance (103,000)

Cash collected       $340,000

B) The cash collection from customers is the difference between the beginning balance and the sales for the current year minus the ending balance, all other things being equal.  If you want to double-check this, you can start with the beginning balance, add the sales and subtract this cash collection from the sum to obtain the ending balance, thus:

Beginning Balance    $68,000

Sales                          375,000

Total outstanding   $443,000

less cash collection  340,000

Ending balance       $103,000