n its CASH BASIS income statement for the year ended June 30, 2020, Selena Corp. reported revenue of $142,000 (i.e., total cash receipts from sales). Additional information was as follows: Accounts receivable June 30, 2019 $40,000 Accounts receivable June 30, 2020 $45,600 Under the ACCRUAL basis, Selena Corp. should report sales revenue of A. $147,600 B. $102,000 C. $182,000 D. $136,400
n its CASH BASIS income statement for the year ended June 30, 2020, Selena Corp. reported revenue of $142,000 (i.e., total cash receipts from sales). Additional information was as follows:
Accounts receivable June 30, 2019 $40,000
Accounts receivable June 30, 2020 $45,600
Under the ACCRUAL basis, Selena Corp. should report sales revenue of
| A. |
$147,600 |
|
| B. |
$102,000 |
|
| C. |
$182,000 |
|
| D. |
$136,400 |
Total cash receipts for the year ended June 30, 2020, are $142,000.
Increase in accounts receivable = $5,600
An increase in accounts receivables implies that sales have been more than the cash collections. It means an increase in accounts receivable of $5,600 implies that sales are $5,600 more than cash collections.
Step by step
Solved in 2 steps
