Question
The controller of Harrington Company estimates sales and production for the first four months of 2016 as follows: January February March April Sales $33,600 $44,100
The controller of Harrington Company estimates sales and production for the first four months of 2016 as follows:
January | February | March | April | |||||
Sales | $33,600 | $44,100 | $51,100 | $24,600 | ||||
Production in units | 1,090 | 1,650 | 2,130 | 2,650 |
Sales are 40% cash and 60% on account, and 60% of credit sales are collected in the month of the sale. In the month after the sale, 40% of credit sales are collected. It takes 4 kg of direct material to produce a finished unit, and direct materials cost $5 per kg. All direct materials purchases are on account, and are paid as follows: 40% in the month of the purchase, 60% the following month. Ending direct materials inventory for each month is 40% of the next months production needs. Januarys beginning materials inventory is 1,744 kg. Suppose that both accounts receivable and accounts payable are zero at the beginning of January. Answer the following questions: What is the accounts receivable balance at the end of March?
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