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QUESTION 40 Green Company is trying to estimate its cash inflows for the third quarter by...

QUESTION 40

  1. Green Company is trying to estimate its cash inflows for the third quarter by month.There are cash sales each month equal to 25 percent of total sales. The collection pattern for credit sales has been: 60 percent in the month of sale; 30 percent in the month after sale; and the rest two months after sales. Uncollectible accounts are negligible. The sales for the quarter are estimated as follows: July, $30,000; August, $15,000; September $35,000.

    Accounts Receivable on June 30 were $10,000
    The Accounts Receivable balance on September 30th was:
    A.

    $11,625
    B.

    $ 8,500
    C.

    $12,000
    D.

    $ 9,000
Business   Accounting   
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Answer #1

The answer is 11625

Credit Sales for July          22,500
Credit Sales for August          11,250
Credit Sales for Septmebr          26,250
Total Credit Sales         60,000
40% are pending of september Credit Sales          10,500
10% are pending of July Credit Sales            1,125
Closig Accounts Receivable         11,625

75% of total sales are credit sales

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