Question
Harrington makes all sales on account, subject to the following collection pattern: 20% are collected in the month of sale; 70% are collected in the
Harrington makes all sales on account, subject to the following collection pattern: 20% are collected in the month of sale; 70% are collected in the first month after sale; and 10% are collected in the second month after sale. If sales for June, July, and August were $60,000, $90,000, and $70,000, respectively, what were the firm's budgeted collections for August and the company's budgeted receivables balance on August 31?
| August Collections | August 31 Receivables Balance | |||||
| A. | $ | 77,000 | $ | 97,000 | ||
| B. | $ | 83,000 | $ | 65,000 | ||
| C. | $ | 83,000 | $ | 63,000 | ||
| D. | $ | 177,000 | $ | 65,000 | ||
| E. | None of these options is correct. | |||||
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Frank Woods Business Accounting Volume 1
Authors: Alan Sangster, Frank Wood
13th Edition
9781292084664
