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Answer: Debit Accounts receivable for $600.
Explanation:
The customer had not been billed so that means that they still owe the company. This would make them an accounts receivable so the adjusting entry will have to debit the Accounts Receivable account for $600 to show that it is increasing.
This amount will be credited to the Accrued revenue account to show that the cash has not yet been received.
Answer:
The accounts receivable balance on May 31 is $17850
Explanation:
First we need to determine the amount of credit sales for the month of May. The credit sales for May will be 70% of the total sales for May. Thus, the credit sales for May are,
Credit sales- May = 34000 * 0.7 = $23800
The accounts receivable balance at the end of May will contain the amount due from credit sales that are made in May that are still not collected and will be collected in the next month as per the company's policy.
Accounts receivable at the end of May = 23800 * 0.75 = $17850
