Use the information below to answer the following questions.
Sales in December were $960,000. Projected sales for the first quarter of 2018 are: $$\begin{array} { l l }
\text { January } & \$ 1,080,000 \
\text { February } & \$ 1,300,000 \
\text { March } & \$ 1,280,000
\end{array}$$ Sales are 20% cash and 80% on credit. Debtors pay in the month following the sale.
-Refer to the table above. What will be the balance of accounts receivable on 1 March?

Question

Use the information below to answer the following questions.
Sales in December were $960,000. Projected sales for the first quarter of 2018 are: $$\begin{array} { l l } 
\text { January } & \$ 1,080,000 \
\text { February } & \$ 1,300,000 \
\text { March } & \$ 1,280,000
\end{array}$$ Sales are 20% cash and 80% on credit. Debtors pay in the month following the sale.
-Refer to the table above. What will be the balance of accounts receivable on 1 March?

Quizplus · Accepted Answer

The balance of accounts receivable on 1 March will include the credit sales from February, since debtors pay in the month following the sale. February's sales are $1,300,000, and 80% of this is on credit, so the accounts receivable balance on 1 March is 80% of $1,300,000, which is $1,040,000.