Complete Question:
PA9.
LO 7.3 Fit band's estimated sales are:
$
OCTOBER 131,982
NOVEMBER 195,723
DECEMBER 249,283
JANUARY 124,298
FEBRUARY 124,284
MARCH 124,373
What are the balances in accounts receivable for January, February, and March if 65% of sales is collected in the month of sale, 25% is collected the month after the sale, and 10% is second month after the sale?
Answer:
JANUARY FEBRUARY MARCH
Amount received from November sales 19,572
Amount received from December sales 62,321 24,928
Amount received from January sales 80,794 31,075 12,430
Amount received from November sales <u> </u> <u> </u> <u> 31,071 </u>
TOTAL <u>$162,687 </u> <u>$56,003</u> <u>$43,501 </u>
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Explanation:
The balances calculated are based on the following formula:
Amount received = Sales Figure of that month * Percentage
65% in the month of sale is received, 25% in the next month and the residual is received in the second month after sales
For the month of November:
65% of its total sales will be received in november, 25% in the next month(December) and the residual 10% in the second month after sale(January). Likewise for the month of January, we see in the computation that 65% of sales was received in the same month, 25% in the next month February and the residual 10% in the second after sale which is in March.
