Outback Corp. recorded sales of $1,300,000 in 2010, in addition the company's accounts receivable balance grew from $120,000 at the beginning of 2010 to $165,000 at the end of 2010. How much cash did Outback collect from customers in 2010

$1,255,000

Explanation:

The increase in accounts receivable is the portion of the current year sales revenue that has not been received in cash, hence, the cash collected from customers in the year 2010 is simply the sales adjusted for the impact of accounts receivable as shown below:

cash collection=sales revenue+beginning accounts receivable-ending accounts receivable

sales revenue=$1,300,000

beginning accounts receivable=$120,000

closing accounts receivable=$165,000

cash collection=$1,300,000+$120,000-$165,000

cash collection=$1,255,000

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