Igor Corporation's accounts receivable, net of allowance for uncollectibles, were $250,000 at December 31, Year 3, and $350,000 at December 31, Year 4.Net cash sales for Year 4 were $300,000.The accounts receivable turnover was 6.0.Igor's net sales for Year 4 were
A)$1,500,000
B)$1,800,000
C)$2,000,000
D)$2,100,000
E)$2,200,000

Question

Quizplus · Accepted Answer

First, we need to calculate the average accounts receivable for the year:
(250,000 + 350,000) / 2 = 300,000

Then, we can calculate net credit sales for the year:
Net credit sales = Total sales - Net cash sales
Accounts receivable turnover = Total sales / Average accounts receivable
6.0 = Total sales / 300,000
Total sales = 1,800,000

Finally, we can calculate net sales:
Net sales = Total sales - Sales returns and allowances - Discounts
We don't have information about sales returns and allowances or discounts, so we'll assume they're negligible and use the total sales figure:
Net sales = $1,800,000

Therefore, the correct answer is D) $2,100,000.

Igor Corporation's Accounts Receivable, Net of Allowance for Uncollectibles, Were