The following information was taken from the 2005 financial statement of the AB Corporation:
Accounts receivable, Jan 1, 2005 $30,000
Accounts receivable, Dec 31, 2005 $40,000
Sales ( all credit sales) $480,000
Note: No accounts receivable were written off or recovered during the year.
a) Determine the cash collected from customers by the AB Corporation in 2005
b) Comment on why cash collected from customers differed from sales.
Opening accounts receivable = 30,000
Closing accounts receivable = 40,000
Sales = 480,000
They collected $470,000 from customers throughout the year. This number ...
This problem reveals how to determine what cash has been collected from customers.