The Gardner Company expects sales for October of $248,000.Experience suggests that 45% of sales are for cash and 55% are on credit.The company collects 50% of its credit sales in the month of sale and 50% in the month following sale.Budgeted Accounts Receivable on September 30 is $67,000.What is the amount of Accounted Receivables on the October 31 budgeted balance sheet?

Question

Quizplus · Accepted Answer

Step 1: Calculate the total credit sales for the month of October
Total Sales = $248,000
Credit Sales = 55% of Total Sales = $136,400

Step 2: Calculate the collections for credit sales
50% of Credit Sales collected in October = $68,200
50% of Credit Sales collected in November = $68,200

Step 3: Calculate the ending Accounts Receivable balance for October
Beginning Accounts Receivable = $67,000
Credit Sales = $136,400
Collections in October = $68,200
Ending Accounts Receivable = Beginning Accounts Receivable + Credit Sales - Collections in October = $67,000 + $136,400 - $68,200 = $135,200

Therefore, the amount of Accounts Receivable on the October 31 budgeted balance sheet is $68,200.

The Gardner Company Expects Sales for October of $248,000