Trade Receivables T-Account Balances Credit Sales

Steps:

• Start with the trade receivables T-account: debit side includes opening balance and credit sales; credit side includes cash received, irrecoverable debts written off, and closing balance.
• Set up the equation: Opening receivables + Credit sales = Cash received + Irrecoverable debts + Closing receivables.
• Rearrange for credit sales: Credit sales = Cash received + Irrecoverable debts + Closing receivables - Opening receivables.
• Calculate: $34,700 +$200 + $8,500 -$5,000 = $38,400.

Why C is correct:

• It matches the standard accounting formula for credit sales, where sales must cover collections, write-offs, and net change in receivables.

Why the others are wrong:

• A omits adding irrecoverable debts written off, ignoring their impact on receivables.
• B subtracts an unexplained $15, with no basis in the given data.
• D adds an extra $185, with no supporting information or adjustment.

Final answer: C