Lauras Dress Delivery operates a mail-order business that sells clothes designed for frequent travelers. It had sales

Question:

Laura’s Dress Delivery operates a mail-order business that sells clothes designed for frequent travelers. It had sales of $800,000 in December. Because Laura’s Dress Delivery is in the mail-order business, all sales are made on account. The company expects a 30 percent drop in sales for January. The balance in the account on December 31 was $120,000 and is budgeted to be $82,000 as of January 31. Laura’s Dress Delivery normally collects in the month following the month of sale.

Required
a. Determine the amount of cash Laura’s Dress Delivery expects to collect from during January.
b. Is it reasonable to assume that sales will decline in January for this type of business? Why or why not?

Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that...