Rocha & Noel Company, an importer and retailer of Polish pottery and kitchenware, prepares a monthly master budget.Data for the July master budget are given below: The June 30th balance sheet follows.
Actual sales for June and budgeted sales for July, August, and September are given below.

Sales are 30% for cash and 70% on credit.All credit sales are collected in the month following the sale.There are no bad debts.
The gross margin percentage is 45% of sales.The desired ending inventory is equal to 30% of the following month's sales.One fourth of the purchases are paid for in the month of purchase and the others are purchased on account and paid in full the following month.
The monthly cash operating expenses are $45,000, and the monthly depreciation expenses are $7,500.
What is the balance of the accounts receivable at the end of July?

Question

Rocha & Noel Company, an importer and retailer of Polish pottery and kitchenware, prepares a monthly master budget.Data for the July master budget are given below: The June 30th balance sheet follows.
 Actual sales for June and budgeted sales for July, August, and September are given below.

Sales are 30% for cash and 70% on credit.All credit sales are collected in the month following the sale.There are no bad debts.
The gross margin percentage is 45% of sales.The desired ending inventory is equal to 30% of the following month's sales.One fourth of the purchases are paid for in the month of purchase and the others are purchased on account and paid in full the following month.
The monthly cash operating expenses are $45,000, and the monthly depreciation expenses are $7,500.
What is the balance of the accounts receivable at the end of July?

Quizplus · Accepted Answer

Balance of the accounts receivable at the end of July = (Budgeted sales in the month of July × Budgeted sales on credit in the month of July)
Balance of the accounts receivable at the end of July = 70% × $370,000 = $259,000

Rocha & Noel Company, an Importer and Retailer of Polish