What is the budgeted balance of Ross's accounts receivable as of July 31?
A) $375,000.
B) $399,000.
C) $415,000.
D) $396,000.

Question

Quizplus · Accepted Answer

The budgeted credit sales for July are $400,000 (given in the question). The budgeted accounts receivable as of June 30 is $390,000 (also given in the question). Therefore, the total accounts receivable for July (assuming all sales are on credit) would be $790,000 ($390,000 + $400,000). However, the question states that Ross collects 95% of accounts receivable in the month following the sale. Therefore, the budgeted balance of accounts receivable as of July 31 would be $399,000 ($790,000 x 0.95). Therefore, the best choice is B.

What Is the Budgeted Balance of Ross's Accounts Receivable as of July