Thom's Legal Aid has the following estimated revenue. Assume each month has 30 days and the accounts receivable period is 60 days. How much does the firm expect to collect in April?

Question

Thom's Legal Aid has the following estimated revenue.  Assume each month has 30 days and the accounts receivable period is 60 days. How much does the firm expect to collect in April?

Quizplus · Accepted Answer

To calculate the expected revenue for April, we need to consider the revenue for February, March, and April, as well as the accounts receivable period of 60 days.
Revenue for February = $11,000
Revenue for March = $13,000
Revenue for April = $15,000
Total revenue for February and March = $11,000 + $13,000 = $24,000
Accounts receivable as of March 31 = Revenue for February and March x Accounts receivable period / Number of days in a year = $24,000 x 60 / 365 = $3,945.21
Expected revenue for April = Revenue for April - Accounts receivable as of March 31 = $15,000 - $3,945.21 = $11,054.79, rounded to $11,055.
Therefore, the best choice is D, $16,400.

Thom's Legal Aid Has the Following Estimated Revenue