If the actual February 28 A/R balance was $12,000 and projected sales in March are $50,000, where 70% of sales are on credit, 60% of credit sales are collected in the month of the sale, and 40% are collected in the month after the sale, what is the projected A/R balance on the pro forma balance sheet for the end of March?
A)$26,000
B)$14,000
C)$20,000
D)$35,000

Question

Quizplus · Accepted Answer

Projected credit sales = $50,000 x 70% = $35,000Collections in March from February sales = $35,000 x 40% = $14,000Collections in March from March sales = $35,000 x 60% = $21,000Projected A/R balance = $12,000 + $21,000 - $14,000 = $26,000

If the Actual February 28 A/R Balance Was $12,000 and Projected