Suppose Columbia Sportswear Company had accounts receivable of $206,024,000 at the beginning of a recent year, and $267,653,000 at year-end. Sales revenue was $1,095,307,000 for the year. What is the amount of cash receipts from customers?

The amount of cash receipts from customers is $1,033,678,000.

Explanation:

Assuming that the firm operates wholly on credit sales, the amount of cash receipts from the customers can be determined by:

Closing balance of Accounts receivable = Opening balance of Accounts receivable + credit sales for the period - receipts from the customers

As we know the closing and opening balance and the value of sales, plugging in the known variables in the formula we can calculate the amount of receipts from the customers.

267,653,000 = 206,024,000 + 1,095,307,000 - receipts from customers

Receipts from customers = 206,024,000 + 1,095,307,000 - 267,653,000

Receipts from customers = 1,033,678,000

The amount of cash receipts from customers is $1,033,678,000

Explanation:

The movement in the accounts receivable balance at the start and end of an accounting period is due to cash payments, additional credit sales, and any amount written off during the period.

This may be expressed mathematically as

opening balance + sales - cash collected - amount written off = closing balance

$206,024,000 + $1,095,307,000 - cash collected = $267,653,000

Cash collected = $206,024,000 + $1,095,307,000 - $267,653,000

= $1,033,678,000