Question

Harrti Corporation has budgeted for the following sales:

July	$	447,000
August	$	582,000
September	$	616,000
October	$	891,000
November	$	740,000
December	$	700,000

Sales are collected as follows: 20% in the month of sale; 55% in the month following the sale; and the remaining 25% in the second month following the sale. In Razz's budgeted balance sheet at December 31, at what amount will accounts receivable be shown?

Answer 1

The correct answer is $ 745,000

Note:

Accounts Receviable on December 31 = $ 740,000 * 25 % + $ 700,000* 80%

= $ 745,000  

	July	August	September	october	November	December
Sales	4,47,000.00	5,82,000.00	6,16,000.00	8,91,000.00	7,40,000.00	7,00,000
Receipts of Credit Sales:
1. 20% in the Month of Sale	89,400.00	1,16,400.00	1,23,200.00	1,78,200.00	1,48,000.00	1,40,000.00
2. 55% in the month following the month of sale	-	2,45,850.00	3,20,100.00	3,38,800.00	4,90,050.00	4,07,000.00
3. 25%  in 2 Months following Month of Sales			1,11,750.00	1,45,500.00	1,54,000.00	2,22,750.00
	-	-	-	-	-
As on December 31	Received	Received	Received	Received	25% Remaining	80 % Remaining