Question

The LaPann Company has obtained the following sales forecast data: July August September October Cash Sales...

The LaPann Company has obtained the following sales forecast data:

July

August

September

October

Cash Sales

$80,000

$70,000

$50,000

$60,000

Credit Sales

$240,000

$220,000

$180,000

$200,000


The regular pattern of collection of credit sales is 30% in the month of sale and 70% in the month following the month of sale.  There are no bad debts.

The budgeted accounts receivable balance on September 30th is:

  1. $126,000
  2. $154,000
  3. $161,000
  4. $186,000
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Answer #1
Correct Option A i.e. $126,000
July August September October
Cash Sales             80,000           70,000      50,000       60,000
Credit Sales           240,000         220,000    180,000    200,000
accounts receivable balance on September 30th is          126,000
(180000*70%) (70% of september sales)
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