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28 August, 09:15

XYZ Company ended year 1 with accounts receivable of $100,000. On February 1, Year 2 XYZ provided services on account for $40,000. On May 1, Year 2 XYZ provided services for $20,000 cash. On November 1, Year 2 XYZ provided services on account for $70,000. What is the ending balance in accounts receivable as of December 31, Year 2?

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  1. 28 August, 10:32
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    Account at December 31th, Year 2: 210,000

    Explanation:

    We work this using the following reasoning

    beginning accounts receivable

    + sales on accounts

    Total amount to collect

    - collection through the period

    ending accounts receivable

    year 2

    beginning accounts receivable 100,000

    + February 1st sale on account 40,000

    + November 1st sale on account 70,000

    total amount to collect 210,000

    As we are not given with any data for collection we assume is zero.

    Therefore ending AR balance:

    210,000 - 0 = 210,000
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