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

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The Accounts Receivable on October 31 includes 50% of October's credit sales that will be collected in November. October's credit sales are 55% of $248,000, which is $136,400. Half of this amount, $68,200, will be collected in November, thus remaining in Accounts Receivable on October 31.

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