Realand Ltd.\'s budgeted sales for the first three months of 20x12 are as follow
ID: 2433064 • Letter: R
Question
Realand Ltd.'s budgeted sales for the first three months of 20x12 are as follows January February March $535773 866609 205000 Realand's actual sales for December 20x11 were $780000. ofthe total sales, 29% are cash sales and the remand er is on account. The company's cash collection patterns for sales made on account are as follows Collected in the month of sale Collected in the month following the sale Collected in the second month following the sale 22% 50% 28% What is Realand's budgeted accounts receivable balance at the end of February 20x127 Select one a. S106512 b. $825971 c. $414158 d $586440 The correct answer is, $586440Explanation / Answer
Credit sales for a month=(100-29)=71% of budgeted sales
Budgeted accounts receivable at end of February=(78%*Credit sales for February)+(28%*Credit sales for January)
Credit sales for:
February=(0.71*866609)=$615292.39
January=(0.71*535773)=$380398.83
Hence Budgeted accounts receivable at end of February=(78%*Credit sales for February)+(28%*Credit sales for January)
=(0.78*$615292.39)+(0.28*380398.83)
which is equal to
=586440(Approx).
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