1. The CRCR Corporation is doing budgets for the last quarter of its fiscal year
ID: 2378776 • Letter: 1
Question
1. The CRCR Corporation is doing budgets for the last quarter of its fiscal year, which ends on December 31. The company expects to make total sales by month of:
Sept
Oct
Nov
Dec
Jan
$50,000
$52,500
$63,000
$81,900
$32,760
Of total sales each month, 40% will be in cash. Remaining sales will be made on credit. The company expects to collect 55% of all credit sales in the month the sale was made and in time for the customer to take a 2.5% prompt payment sales discount. The company will collect an additional 40% of credit sales in the month after the sale. What is the expected balance in accounts receivable at the end of November?
Sept
Oct
Nov
Dec
Jan
$50,000
$52,500
$63,000
$81,900
$32,760
Explanation / Answer
Hi,
Please find the answer as follows:
October Sales = 52500*.60*.05 = 1575 (yet to be collected)
+
November Sales = 63000*.60*.40 = 15120 (this will be collected in the month of December)
Accounts Receivable Balance at the End of November = 1575 + 15120 = 16695
Answer is 16695.
Thanks.
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