Starfish Industries' sales budget for the first quarter of the upcoming year shows budgeted sales of $325,000, $350,000, and $310,000 in January, February, and March, respectively.All sales are made on credit.The cash receipts budget for March shows total cash receipts equal to $306,840.Starfish grants a discount to customers who pay within 10 days of the invoice.Starfish collects 60% of sales within the discount period, 20% in the month of sale but outside the discount period, 20% in the month following sale.What is the discount offered by Starfish, and what is the Accounts Receivable balance that will be reported in the March 31 pro-forma balance sheet?
A)6%; $73,160
B)6%; $62,000
C)4%; $70,000
D)4%; $73,160

Question

Quizplus · Accepted Answer

The Answer of Starfish Industries' sales budget for the first quarter of the upcoming year shows budgeted sales of $325,000, $350,000, and $310,000 in January, February, and March, respectively.All sales are made on credit.The cash receipts budget for March shows total cash receipts equal to $306,840.Starfish grants a discount to customers who pay within 10 days of the invoice.Starfish collects 60% of sales within the discount period, 20% in the month of sale but outside the discount period, 20% in the month following sale.What is the discount offered by Starfish, and what is the Accounts Receivable balance that will be reported in the March 31 pro-forma balance sheet?
A)6%; $73,160
B)6%; $62,000
C)4%; $70,000
D)4%; $73,160

Starfish Industries' Sales Budget for the First Quarter of the Upcoming