Use the following information for the next 2 questions.
Taft Corporation collects cash from customers as follows: 60% in the month of sale, 20% in the month after sale, 19% in the second month after sale, and 1% is never collected. Bad debts are written off annually in December. Budgeted sales are all on credit and amount to:
-What is the budgeted amount of accounts receivable at the end of August?
A) $353,000
B) $340,000
C) $329,000
D) $377,000

Question

Use the following information for the next 2 questions.
Taft Corporation collects cash from customers as follows: 60% in the month of sale, 20% in the month after sale, 19% in the second month after sale, and 1% is never collected. Bad debts are written off annually in December. Budgeted sales are all on credit and amount to: 
-What is the budgeted amount of accounts receivable at the end of August?
A) $353,000 
B) $340,000 
C) $329,000 
D) $377,000

Quizplus · Accepted Answer

The budgeted amount of accounts receivable at the end of August is $353,000. This is calculated by taking the beginning balance of accounts receivable, adding the budgeted sales for August, and then subtracting the budgeted collections for August.

Use the Following Information for the Next 2 Questions