April Wood Products’ accounts receivable increased during the year by $4 million

Question

April Wood Products’ accounts receivable increased during the year by $4 million.

What is the amount of cash April Wood Products received from customers during the reporting period if its sales were $44 million? (Enter your answer in millions (i.e., 10,000,000 should be entered as 10).)

Prepare a summary entry that represents the net effect of the selling and collection activities during the reporting period. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions (i.e., 10,000,000 should be entered as 10).)

April Wood Products’ accounts receivable increased during the year by $4 million.

Explanation / Answer

Answer:-

What is the amount of cash April Wood Products received from customers during the reporting period if its sales were $44 million?

Sales = CAsh sales + credit sales

44,000,000 = Cash Sales + 4,000,000

Cash sales = $40,000,000

Cash received from customers = $40 million

Prepare a summary entry that represents the net effect of the selling and collection activities during the reporting period?

Dr Accounts receivable 4,000,000

Dr Cash 40,000,000

Cr Sales 44,000,000

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