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. | |||||
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Finance The Basics
Authors: Erik Banks
3rd Edition
1138919780, 9781138919785
