Westover Products has the following estimated monthly sales. The accounts receivable period is 45 days. What is the amount of the collections in May? Assume each month has 30 days.

Question

Westover Products has the following estimated monthly sales.  The accounts receivable period is 45 days. What is the amount of the collections in May? Assume each month has 30 days.

Quizplus · Accepted Answer

To calculate the amount of collections in May, we need to consider the sales made in March.

Total Sales in March = $10,000 + $12,000 + $9,000 + $8,000 = $39,000

Accounts Receivable after 45 days (April) = 45/30 * $39,000 = $58,500

This means that $58,500 was billed in April, and this amount needs to be collected in May.

Therefore, the amount of collections in May = $58,500 = $9,050 (option D).

Westover Products Has the Following Estimated Monthly Sales