Question
Austinco has the following budgeted sales: July $90,000; August 80,000; September 110,000; October 85,000. Historically, the cash collection ofsates has been as follows: 55% ofsales
Austinco has the following budgeted sales: July $90,000; August 80,000; September 110,000; October 85,000. Historically, the cash collection ofsates has been as follows: 55% ofsales collected in the month ofsate; 35% ofsales collected in the month tbllowing the sate; 10% of sates collected in the second month following the sate. What is the expected September 30 balance in Accounts Receivable?
Answer- Calculation of balance of accounts receivable as on 30th sept August sales=80000*10%=$8000
Sept sales=110000*45%=$49500 Total recievable=$57500
Why is the Answer is 45% * 110000 but not 35%*110000
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