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Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
ISBN: 9781337690881

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BuyFindarrow_forward

Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
ISBN: 9781337690881
Textbook Problem
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Cash Receipts from Customers

Singleton Inc. had accounts receivable of $22,150 at January 1, 2019, and $26,850 at December 31, 2019. Net income for 2019 was $125,300 and sales revenue was $1,240,000.

Required:

Compute the amount of cash collected from customers using the direct method.

To determine

Introduction:

Sale revenue includes both cash sales and credit sale, when all sales are for cash, the cash collected form customer equals to sales. However, when credit sales are made, the amounts of cash that was collected during a period must be determined by analyzing the sales and accounts receivable accounts. The accounts receivable account increases when credit sale is recorded and decrease when cash is collected from customers.

To choose:

Compute the amount of cash collected from customer using the direct method.

Explanation

Prepare the accounts receivable accounts

Accounts Receivable accounts

...
Particular Amounts ($) Particular

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