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    Balancing sheet

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    The following information is available for Small Corporation's first year of operations:

    Payment for merchandise purchases $250,000
    Ending merchandise inventory 110,000
    Accounts payable (balance at end of year) 60,000
    Collections from customers 225,000

    The balance in accounts payable relates only to merchandise pur-
    chases. All merchandise items were marked to sell at 40% above
    cost. What should be the ending balance in accounts receivable,
    assuming all accounts are deemed collectible?

    Solution: (hint)

    Purchases - $250,000
    less inv -
    CGS -
    Sales markup -

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    Since this is the first year of operations and there were $225,000 of accounts receivable collected, one must compute total sales to determine the ending balance in ...

    Solution Summary

    The solution contains the determination of ending balance in accounts.