# Exercise-7 (Cash received from customers – t accounts approach)

In exercise-6 we used formula approach to calculate cash received from customer. We can also compute this figure by making an accounts receivable t-account. In this exercise, we shall use the data from exercise-6 and calculate cash received from customers during a period using t-accounts approach.

The following information belongs to Alpha company:

• Accounts receivable on December 31, 2015: \$62,000
• Accounts receivable on December 31, 2016: \$70,000
• Allowance for doubtful accounts on December 31, 2015: \$2,100
• Allowance for doubtful accounts on December 31, 2016: \$3,200
• Sales for the year 2015: \$155,300
• Sales for the year 2016: \$126,500

The company sells goods on credit. For the year 2016, bad debts expense were \$7,500 and accounts amounting to \$6,400 were written-off.

Required: Find out the amount of cash collected from customer using t accounts approach.

### Solution:

*Balancing figure – the cash received from customers.