Question

Question 5
A company had a balance in Gross Accounts Receivable of $200,000 on 12/31/2011. The balance in Gross Accounts Receivable was $300,000 on 12/31/2012. During 2012, the company had to write-off $10,000 of accounts as uncollectible, and had no recoveries. Its Bad Debt Expense was $20,000 during 2012. Total sales were $1,000,000 during 2012, all of which were credit sales. How much cash did the company collect from customers during 2012?


$900,000



$890,000



$880,000



$1,000,000



$870,000


1 point
6.
Question 6
Whic

Answer 1

To calculate how much cash the company collected from customers during 2012, we can use the following formula that relates the beginning and ending accounts receivable, credit sales, and cash collections:

**Cash Collections = Beginning Accounts Receivable + Credit Sales - Ending Accounts Receivable**

1. **Beginning Accounts Receivable (12/31/2011)**: $200,000
2. **Ending Accounts Receivable (12/31/2012)**: $300,000
3. **Credit Sales for 2012**: $1,000,000

Now we substitute the values into the formula:

**Cash Collections = $200,000 + $1,000,000 - $300,000**

Calculating this:

**Cash Collections = $200,000 + $1,000,000 = $1,200,000**
**Cash Collections = $1,200,000 - $300,000 = $900,000**

Therefore, the cash collected from customers during 2012 is **$900,000**.

The correct answer is: **$900,000**.