You are given the following information:
Receivables at 1 January 20X7 $ 30,000
Receivables at 31 December 20X7 $ 15,000
Total receipts during 20X7 (including cash sales of $ 10,000 ) $ 90,000
What are sales on credit during 20X7?
Answer
Step 1:
Closing Account Receivable = opening AR + total sale – cash received
So, Total sale = closing AR – opening AR + cash received = 15,000-30,000+90,000=75,000
Step 2:
Total sale = cash sale + credit sale
So, Credit sale = total sale – cash sale = 75,000-10,000=65,000
Credit sales =$65,000