Question

Our Taylor, Inc., reported credit sales of $2,500,000 for 2019. Cost of goods sold was $900,000. The following additional information is available from the company’s records: December 31, 2019 December 31, 2018 Accounts receivable $60,000 $40,000 Inventory $75,000 $80,000 Accounts receivable $60,000 $40,000 How much cash did the company collect from customers in 2019?

Answer 1

Answer:

2,480,000 = cash collections from customers during 2019

Explanation:

$Beginning Accounts Receivable +Credit Sales - Collections Equals Ending Accounts Receivable$

             40,000 beginning

     +2,500,000 sales

     - collections

equals 60,000 ending

40,000 + 2,500,000 - collections = 60,000

40,000 + 2,500,000 - 60,000 = colelctions

2,480,000 = cash collections from customers during 2019