As of January 1 of the current year,the Gunner Company had accounts receivables of $50,000.The sales for January,February,and March were as follows: $120,000,$140,000,and $150,000,respectively.Of each month's sales,20% are for cash.Of the remaining 80% (the credit sales),60% are collected in the month of sale,with the remaining 40% collected in the following month.What is the accounts receivable balance as of March 31?
A) $72,000
B) $48,000
C) $58,720
D) $60,000

Question

Quizplus · Accepted Answer

The accounts receivable balance as of March 31 is calculated by considering the credit sales not yet collected. For March, 80% of $150,000 is $120,000 in credit sales. 60% of these are collected in March, leaving 40% ($48,000) to be collected in April. Additionally, the remaining 40% of February's credit sales ($112,000) is $44,800, which is collected in March. Therefore, the accounts receivable balance at the end of March is $48,000.

As of January 1 of the Current Year,the Gunner Company