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3 January, 17:57

On April 30, Victor Services had an Accounts Receivable balance of $40,000. During the month of May, total credits to Accounts Receivable were $76,000 from customer payments. The May 31 Accounts Receivable balance was $33,000. What was the amount of credit sales during May

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  1. 3 January, 19:40
    0
    Credit sales is $69,000

    Explanation:

    Account receivables can be defined as the amount of money owed by customers to a company because it is convertible to cash in the future. The company is entitled to receive the money because it has provided a product or service.

    The amount of credit sales can be calculated as:

    Final balance of account receivable = Opening balance + credit sales - customer payments

    Final balance = 33,000

    Opening balance = 40,000

    Customer payment = 76,000

    Credit sales is unknown

    33,000 = 40,000 + credit sales - 76,000

    Make credit sales the subject of the formular

    Credit sales = 33,000 + 76,000 - 40,000

    Credit sales = $69,000

    Therefore the credit sales is $69,000.
  2. 3 January, 20:40
    0
    Credit sales = $69,000

    Explanation:

    Accounts receivable is a transit account that is used to show revenue that is owed to the business by other parties such as vendors.

    The portion of accounts receivable that is collected contributes to profits, while the portion that is not collectible results in loss to the business.

    When customers pay the balance in the account reduces, while when credit sales are made the balance increases.

    Final balance of account receivable = Opening balance + credit sales - customer payments

    33,000 = 40,000 + credit sales - 76,000

    Credit sales = 33,000 + 76,000 - 40,000

    Credit sales = $69,000
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