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4 January, 18:32

Suppose Columbia Sportswear Company had accounts receivable of $206,090,000 at the beginning of a recent year, and $267,085,000 at year-end. Sales revenue was $1,093,860,000 for the year. What is the amount of cash receipts from customers?

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  1. 4 January, 19:33
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    The amount of cash receipts from customers: $1,032,865,000

    Explanation:

    Assuming that all Sales revenue was on credit sales.

    In Suppose Columbia Sportswear, Sales revenue was $1,093,860,000, accounts receivable in the year increased $1,093,860,000. Basing on formula:

    Accounts receivable at year-end = Accounts receivable at the beginning of the year + Accounts receivable increasing in the year - Accounts receivable decreasing in the year

    Thefore:

    Accounts receivable decreasing in the year = Accounts receivable at the beginning of the year + Accounts receivable increasing in the year - Accounts receivable at year-end = $206,090,000 + $1,093,860,000 - $267,085,000 = $1,032,865,000

    This is also the amount of cash receipts from customers.
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