A firm has forecasted sales of $3,000 in April,$4,500 in May,and $6,500 in June.All sales are on credit.30% is collected the month of sale and the remainder the following month.What will be the balance in accounts receivable at the end of June?

Question

Quizplus · Accepted Answer

Sales made in April: $3,000
Sales made in May: $4,500
Sales made in June: $6,500

30% of April sales collected in April: (30/100)*$3,000 = $900
70% of April sales collected in May: (70/100)*$3,000 = $2,100

30% of May sales collected in May: (30/100)*$4,500 = $1,350
70% of May sales collected in June: (70/100)*$4,500 = $3,150

30% of June sales collected in June: (30/100)*$6,500 = $1,950
70% of June sales will be collected in July

Therefore, the total amount of accounts receivable at the end of June will be:

($2,100 + $3,150 + $6,500 - $900 - $1,350 - $1,950) = $4,550

So the best answer choice is C).

A Firm Has Forecasted Sales of $3,000 in April,$4,500 in May,and