T.J. Waxham's has a beginning receivables balance on January 1 of $1,460. Sales for January through April are $1,200, $1,450, $1,580, and $1,640, respectively. The accounts receivable period is
30 days. How much did the ﬁrm collect in the month of April? Assume that a year has 360 days.

Question

Quizplus · Accepted Answer

To find out how much the firm collected in the month of April, we need to calculate the ending balance of accounts receivable at the end of each month.

Beginning balance: $1,460

January sales: $1,200, so ending balance for January would be ($1,460 + $1,200) = $2,660

February sales: $1,450, so ending balance for February would be ($2,660 + $1,450) = $4,110

March sales: $1,580, so ending balance for March would be ($4,110 + $1,580) = $5,690

April sales: $1,640, so ending balance for April would be ($5,690 + $1,640) = $7,330

Since the accounts receivable period is 30 days, the average daily sales for the four months are ($1,200+$1,450+$1,580+$1,640)/4 = $1,467.50.

Therefore, the firm would have collected ($7,330 - $5,690 - ($1,467.50 x 30)) = $1,580 in the month of April.

Hence, the correct answer is D) $1,580.

TJ Waxham's Has a Beginning Receivables Balance on January 1