Figure 8-4 Discus Productions needs to know its anticipated cash inflows for the next quarter by month. Cash sales are 10 percent of total sales each month. Historically, sales on account have been collected as follows: 60 percent in the month of sale, 30 percent in the month after the sale, and the remaining 10 percent two months after the sale. Sales for the quarter are projected as follows: April, $120,000; May, $100,000; and June, $80,000. Accounts receivable on March 31 were $60,000.
Refer to Figure 8-4. Discus Productions would expect to have an accounts receivable balance on June 30 of

Question

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Accounts receivable on June 30 = $37,800.The accounts receivable balance on June 30 is the sum of the accounts receivable from April, May, and June sales.April sales: $120,000 x 10% = $12,000May sales: $100,000 x 10% = $10,000June sales: $80,000 x 10% = $8,000Total accounts receivable from sales: $12,000 + $10,000 + $8,000 = $30,000Accounts receivable from March sales: $60,000 x 10% = $6,000Total accounts receivable: $30,000 + $6,000 = $36,000Accounts receivable on June 30: $36,000 + $1,800 = $37,800

Figure 8-4 Discus Productions Needs to Know Its Anticipated Cash