A corporation issues for cash $1,000,000 of 10%, 20-year bonds, interest payable annually, at a time when the market rate of int
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Answer:
$672,000
Explanation:
The computation of the account receivable balance at the end of July month is shown below:
Particular June July August September
Unit sales 8,500 16,000 18,000 19,000
Unit selling
price $70 $70 $70 $70
Sales $595,000 $1,120,000 $1,260,000 $1,330,000
Credit sales collection
40% in this
month sale $238,000 $448,000 $504,000 $532,000
60% in the
following month $357,000 $672,000 $756,000
Total collection $238,000 $805,000 $1,176,000 $1,288,000
For the account receivable at the end of July we considered the 60% oustanding amount i.e $672,000
