Green Company's sales are 20% cash and 80% credit. Of the credit sales, 60% are collected in the month of sale and 30% in the month following the sale. The balance is collected during the following month. Budgeted sales data is as follows: $$\begin{array} { l l }
\text { June } & \$ 300,000 \
\text { July } & \$ 250,000 \
\text { August } & \$ 280,000 \
\text { September } & \$ 310,000
\end{array}$$ How much is total Accounts Receivable at the end of August?

Question

Green Company's sales are 20% cash and 80% credit. Of the credit sales, 60% are collected in the month of sale and 30% in the month following the sale. The balance is collected during the following month. Budgeted sales data is as follows: $$\begin{array} { l l } 
\text { June } & \$ 300,000 \
\text { July } & \$ 250,000 \
\text { August } & \$ 280,000 \
\text { September } & \$ 310,000
\end{array}$$ How much is total Accounts Receivable at the end of August?

Quizplus · Accepted Answer

To calculate Accounts Receivable at the end of August, consider the uncollected credit sales from July and August. For July: 10% of $250,000 (remaining uncollected) = $20,000. For August: 40% of $224,000 (80% of $280,000 credit sales) = $89,600. Total Accounts Receivable = $20,000 + $89,600 = $109,600.

Green Company's Sales Are 20% Cash and 80% Credit How Much Is Total Accounts Receivable at the End of the Credit