Dolce Co. estimates its sales at 180,000 units in the first quarter, 198,000 units in the second quarter, 216,000 units in the third quarter, and 234,000 units in the fourth quarter. They have, and desire, a 25% ending inventory of finished goods. Each unit sells for $25. 40% of the sales are for cash. 70% of the credit customers pay within the quarter. The remainder is received in the quarter following sale.
Accounts Receivable at the end of the third quarter is budgeted at
A.
$2,268,000
B.
$1,944,000
C.
$1,620,000
D.
$972,000
What is the right option?
| Account Receivable for end of third quarter | |
| Total sales for third quarter | $ 5,400,000 |
| ($216000*$25) | |
| Less: | |
| Cash Sales ($5400000*0.4) | $ 2,160,000 |
| Credit Sales | $ 3,240,000 |
| Amount Paid In quarter itself | $ 2,268,000 |
| ($3240000*70%) | |
| Account Receivables | $ 972,000 |
| Correct Optiion: D.972000 | |
| Please upvote. | |
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