On January 1, 2012, Lexmark Company's Accounts receivable account had a debit balance of $10,000. During January, 2012, the company billed customers for services in the amount of $300,000. Also during January, the company collected $240,000 from its customers on account. What was the balance in the Accounts receivable account at the end of January?
A) $60,000
B) $250,000
C) $70,000
D) $10,000
250,000
60,000
To find the balance in the Accounts Receivable account at the end of January, we need to subtract the amount collected from the amount billed, and then add it to the beginning balance.
1. Begin by calculating the beginning balance:
The beginning balance of the Accounts Receivable account on January 1, 2012, is given as a debit balance of $10,000.
2. Calculate the amount billed to customers in January:
The company billed customers for services in the amount of $300,000.
3. Calculate the amount collected from customers in January:
The company collected $240,000 from its customers on account.
4. Subtract the amount collected from the amount billed:
$300,000 - $240,000 = $60,000
5. Add the resulting amount to the beginning balance:
$10,000 + $60,000 = $70,000
Therefore, the balance in the Accounts Receivable account at the end of January is $70,000. Hence, the correct answer is C) $70,000.