Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

TES-346 Inc. is a retailer. Its accountants are preparing the company's 2nd quarter master budget. The company has the following balance sheet as of March

TES-346 Inc. is a retailer. Its accountants are preparing the company's 2nd quarter master budget. The company has the following balance sheet as of March 31.

TES-346 Inc.
Balance Sheet
March 31
Assets
Cash $ 96,000
Accounts receivable 139,000
Inventory 70,200
Plant and equipment, net of depreciation 228,000
Total assets $ 533,200
Liabilities and Stockholders Equity
Accounts payable $ 89,000
Common stock 333,000
Retained earnings 111,200
Total liabilities and stockholders equity $ 533,200

TES-346 accountants have made the following estimates:

Sales for April, May, June, and July will be $390,000, $410,000, $400,000, and $420,000, respectively.

All sales are on credit. Each months credit sales are collected 35% in the month of sale and 65% in the month following the sale. All of the accounts receivable at March 31 will be collected in April.

Each months ending inventory must equal 30% of next months cost of goods sold. The cost of goods sold is 60% of sales. The company pays for 40% of its merchandise purchases in the month of the purchase and the remaining 60% in the month following the purchase. All of the accounts payable at March 31 are related to previous merchandise purchases and will be paid in April.

Monthly selling and administrative expenses are always $54,000. Each month $7,000 of this total amount is depreciation expense and the remaining $47,000 is spent for expenses that are paid in the month they are incurred.

The company will not borrow money or pay or declare dividends during the 2nd quarter. The company will not issue any common stock or repurchase its own stock during the 2nd quarter.

How much is the company's expected Accounts Receivable balance on June 30?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Statistical Audit Automation The Principles Of Statistical Sampling Of Business Accounts

Authors: Nathan Poeschl

1st Edition

B0B17YP1SR, 979-8829041991

More Books

Students also viewed these Accounting questions

Question

Organize and support your main points

Answered: 1 week ago

Question

Move smoothly from point to point

Answered: 1 week ago

Question

Outlining Your Speech?

Answered: 1 week ago