Lily Company expects the following total sales: Month Sales March $30,000 April $20,000 May $30,000 June $25,000 The company exp

Question

3 years ago

5

Lily Company expects the following total sales: Month Sales March $30,000 April $20,000 May $30,000 June $25,000 The company exp

ects 60% of its sales to be credit sales and 40% for cash. Credit sales are collected as follows: 30% in the month of sale, 70% in the month following the sale. The budgeted accounts receivable balance on May 31 is: A. $12,240 B. $12,600 C. $20,400 D. $21,000

Business

1 answer:

Arte-miy333 [17] · Answer 1 · 2022-06-03T04:45:02+03:00

Answer:

B. $12,600

Explanation:

<em>"The company expects 60% of its sales to be credit sales and 40% for cash"</em>

Credit sale for May = $30,000 * 60%

Credit sale for May = $18,000

<em>"70% of the credit sale is collected in following month of sale"</em>

Accounts receivables on 31 May = 70% of credit sale for May

Accounts receivables on 31 May = 70% * $18,000

Accounts receivables on 31 May = $12,600