If the actual December 31^st A/R balance was $12,000; projected sales in March are $50,000; 70% of sales are on credit; 60% of credit sales are collected in the month of sale and 40% are collected in the month after the sale, what is the projected A/R balance on the proforma balance sheet for the end of March?

Question

Quizplus · Accepted Answer

Projected credit sales for March = $50,000 x 70% = $35,000Projected cash collections in March from February sales = $35,000 x 40% = $14,000Projected cash collections in March from March sales = $35,000 x 60% = $21,000Projected A/R balance at the end of March = $12,000 + $21,000 - $14,000 = $26,000

If the Actual December 31st A/R Balance Was $12,000; Projected

If the Actual December 31^st A/R Balance Was $12,000; Projected