McLeod Fries, Inc. has budgeted sales for June and July at $670,000 and $770,000, respectively. Sales are 85% credit, of which 6

Question

3 years ago

11

McLeod Fries, Inc. has budgeted sales for June and July at $670,000 and $770,000, respectively. Sales are 85% credit, of which 6

0% is collected in the month of sale and 40% is collected in the following month. What is the budgeted Accounts Receivable balance on July 31? $308,000 $261,800 $227,800 $654,500

Business

1 answer:

ratelena [41] · Answer 1 · 2022-04-14T07:05:41+03:00

Answer:

Account receivable on July 31 = $261,800

Explanation:

We would not be making use of the information for June as the question says 60% is collected in the month of sale and 40% is collected in the following month . Therefore as at July 31, all of june sales would have been collected and won't be outstanding

July credit sales = 85% * $770,000 = $654,500

Collected in July (60%) = 60% * $654,500 = $392,700

Receivable as at 31 July = $654,500 - $392,700 = $261,800