Asked by Chris Mckibben on Apr 24, 2024
Verified
How much cash did Barden collect from customers in Year 4? Assume all sales are on credit.
A) $115,000
B) $407,500
C) $425,000
D) $442,500
Comparative Balance Sheets
Comparative balance sheets display the financial position of a business at different points in time, facilitating the analysis of trends over time.
Year 1
Typically refers to the first year of operation for a business or the initial year in a time series analysis in accounting or finance contexts.
- Analyze the influence of accounting standards and policies on financial reports.
- Evaluate the cash transactions associated with operating, investing, and financial activities.
Verified Answer
CA
Chinedu AjuruchiMay 02, 2024
Final Answer :
D
Explanation :
To calculate the cash collected from customers, we start with the sales figure and adjust it based on the change in accounts receivable. The sales for Year 2 are $900,000. Accounts receivable increased from $50,000 in Year 1 to $100,000 in Year 2, which means the company did not collect $50,000 that it earned in sales. Therefore, the cash collected from customers is $900,000 (sales) - $50,000 (increase in accounts receivable) = $850,000. However, there seems to be a misunderstanding in the question as it asks for Year 4, but the provided data only covers up to Year 2. Based on the available information for Year 2, the calculation is as shown, but the correct answer choice or the year might be misstated.
Learning Objectives
- Analyze the influence of accounting standards and policies on financial reports.
- Evaluate the cash transactions associated with operating, investing, and financial activities.