-Please refer to Oscar's financial statements.All of Oscar's costs and net working capital vary directly with sales.Sales are projected to increase by 10 percent.What is the pro forma accounts receivable balance for next year?
A) $949
B) $1,034
C) $1,113
D) $1,730
E) $2,670
F) None of the above.

Question

-Please refer to Oscar's financial statements.All of Oscar's costs and net working capital vary directly with sales.Sales are projected to increase by 10 percent.What is the pro forma accounts receivable balance for next year?
A) $949 
B) $1,034 
C) $1,113 
D) $1,730 
E) $2,670 
F) None of the above.

Quizplus · Accepted Answer

If all costs and net working capital vary directly with sales, then accounts receivable will also increase by the same percentage as the sales increase. Assuming the current accounts receivable balance is $940, a 10% increase would result in a new balance of $1,034.

-Please Refer to Oscar's Financial Statements