Figure 8-6
The records of Morgantown, Inc. show the following forecasted sales:
Collection pattern:
60 percent in month of sale
40 percent in month following the sale
Accounts receivable as of August 31 $70,000 Finished goods inventory as of August 31 8,000 units
The company has a selling price of $10 per unit and expects to maintain ending inventories equal to 20 percent of next month's sales.
-Refer to Figure 8-6. How much is Accounts Receivable as of October 31?
A) $420,000
B) $460,000
C) $240,000
D) none of the above

Question

Figure 8-6
The records of Morgantown, Inc. show the following forecasted sales:
  Collection pattern:
60 percent in month of sale
40 percent in month following the sale
Accounts receivable as of August 31 $70,000 Finished goods inventory as of August 31 8,000 units
The company has a selling price of $10 per unit and expects to maintain ending inventories equal to 20 percent of next month's sales.
-Refer to Figure 8-6. How much is Accounts Receivable as of October 31?
A) $420,000 
B) $460,000 
C) $240,000 
D) none of the above

Quizplus · Accepted Answer

Without access to Figure 8-6, it is impossible to determine the correct amount for Accounts Receivable as of October 31.

Figure 8-6 The Records of Morgantown, Inc. Show the Following Forecasted Sales