In: Accounting
Converting Sales Revenue to Cash
Smith & Sons is converting its sales revenues to corresponding
cash amounts using the direct method. Sales revenue on the income
statement are $2,050,000.
Beginning and ending accounts receivable on the balance sheet are $116,000 and $68,000, respectively.
Calculate the amount of cash received from customers.
$Answer
Cash received from customers using the Direct Method | |
Sales | $ 20,50,000.00 |
Add: Decrease in Accounts receivable | $ 48,000.00 |
Cash received from customers | $ 20,98,000.00 |
Decrease in Accounts Receivable | |
Beginning Accounts Receivable=(A) | $ 1,16,000.00 |
Ending Accounts Receivable=(B) | $ 68,000.00 |
Decrease in Accounts Receivable=(A)-(B) | $ 48,000.00 |