During the current year, Tachnic, Inc., made cash sales of $285,000 and credit s

Question

During the current year, Tachnic, Inc., made cash sales of $285,000 and credit sales of $460,000.During the year, accounts receivable decreased by $32,000. a-1. Compute the current year amount of net sales reported as revenue in the income statement. (Omit the "$" sign in your response.) Net sales $ a-2. Compute the current year amount of cash received from collecting accounts receivable. (Omit the "$" sign in your response.) Collections from accounts receivable $ a-3. Compute the current year amount of cash received from customers. (Omit the "$" sign in your response.) Cash received from customers $

Explanation / Answer

a-1. Net sales are all sales minus any sales discounts or sales returns. Therefore, this years net sales would be 285000+460000 = 745000 a-2. Collections = 460000+32000 = 492000 (the decrease in accounts receivable balance means that we collected MORE than what we added during the year in credit sales) a-3 Cash received = Collections + cash sales = 492000+285000 = 777000 Hope this helps!

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