Heat incorporated repored the following data for the year ending December 31, 2021: - Accounts receivable and the allowance for doubtful account has a balance of 1,200,000 and 80,000,000 respectively at the beginning of the year. - Cash sales amounted to 900,000 - Customers who took advantage of the 2/10, n/30 terms paid 1,528,800 - Customers who did not take advantage of the discount paid 5,700,000 - Sales returns granted to credit customers amounted 320,000. - Accounts written off is 70,000. - Accounts receivable has a balance of 1,350,000 at the end of the year. Determine the amount of sales revenue under accrual basis of accounting.
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At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
Heat incorporated repored the following data for the year ending December 31, 2021:
- Accounts receivable and the allowance for doubtful account has a balance of 1,200,000 and 80,000,000 respectively at the beginning of the year.
- Cash sales amounted to 900,000
- Customers who took advantage of the 2/10, n/30 terms paid 1,528,800
- Customers who did not take advantage of the discount paid 5,700,000
- Sales returns granted to credit customers amounted 320,000.
- Accounts written off is 70,000.
- Accounts receivable has a balance of 1,350,000 at the end of the year.
Determine the amount of sales revenue under accrual basis of accounting.
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