The following sales budget has been prepared: $$\begin{array} { l r r }
\text { Month } & \text { Cash Sales } & \text { Credit Sales } \
\hline \text { September } & \$ 100,000 & \$ 200,000 \
\text { October } & 125,000 & 180,000 \
\text { November } & 207,000 & 199,000 \
\text { December } & 67,000 & 144,000
\end{array}$$ Collections are 50% in the month of sale, 40% in the month following the sale, and 10% two months following the sale.No uncollectible accounts are anticipated._____ is the expected balance of Accounts Receivable as of October 31.
A)$110,000
B)$180,000
C)$118,000
D)$72,500

Question

The following sales budget has been prepared: $$\begin{array} { l r r } 
\text { Month } & \text { Cash Sales } & \text { Credit Sales } \
\hline \text { September } & \$ 100,000 & \$ 200,000 \
\text { October } & 125,000 & 180,000 \
\text { November } & 207,000 & 199,000 \
\text { December } & 67,000 & 144,000
\end{array}$$ Collections are 50% in the month of sale, 40% in the month following the sale, and 10% two months following the sale.No uncollectible accounts are anticipated._____ is the expected balance of Accounts Receivable as of October 31.
A)$110,000
B)$180,000
C)$118,000
D)$72,500

Quizplus · Accepted Answer

Explanation:Beginning balance of Accounts Receivable is zero.September sales:Cash sales = $100,000Credit sales = $200,000Collections in September:50% of credit sales = $100,000Collections in October:40% of September credit sales = $80,00050% of October credit sales = $90,000Collections in November:10% of September credit sales = $20,00040% of October credit sales = $72,00050% of November credit sales = $99,500Ending balance of Accounts Receivable as of October 31:Beginning balance + Collections in September + Collections in October - Payments in October= $0 + $100,000 + $80,000 + $90,000 - $100,000= $180,000

The Following Sales Budget Has Been Prepared Collections Are 50% in the Month of Sale, 40% in r