Selected Balance Sheet account balances are: WU COMPANY De cember 31 012 $ 16 26

Question

Selected Balance Sheet account balances are: WU COMPANY De cember 31 012 $ 16 26 220 13 ash $ 37 ounts Payable 32,000 unts Receivable 192, Salaries Payable Land Merchandise Inventory Machinery Prepaid Rent Income Taxes Payable 7,000 85,00 63,000 98,000 28,000 1,000 70,000 76 72, 17 4,00 Selected Income Statement and other items for the year 2012 are: Sales Cost of Goods Sold Salary Expense Gain on Sale of Machine Cash Dividends declared and paid Depreciation Expense Rent Expense Income Taxes Expense 943,000 504,000 200,000 30,000 20,000 54,000 90,000 35,000 Cash collections from customers during 2012 amounted to O $ 907,000. $915,000. O $ 943,000. $ 971,000.

Explanation / Answer

Cash collections from customer = Closing account receivable + sales – opening account receivable

                                                          = $ 220,000 + $ 943,000 - $ 192,000

                                                         = $ 1,163,000 - $ 192,000

                                                         = $ 971,000

Hence option “$ 971,000” is correct answer.

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