The controller of Harrington Company estimates sales and production for the first four months of 2020 as
Question:
The controller of Harrington Company estimates sales and production for the first four months of 2020 as follows:
January
February
March
April
Sales
$31,200$42,400
$45,500
$27,500
Production in units
1,0001,5001,8002,200
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 materials 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 and 60% the following month. Ending direct materials inventory for each month is 40% of the next month's production needs.
January's beginning materials inventory is 1,090 kg. Suppose that both accounts receivable and accounts payable are zero at the beginning of January
total cash sales for the January-March quarter 47640
What is the accounts receivable balance at the end of March?
Managerial Accounting Tools for Business Decision Making
ISBN: 978-1118856994
4th Canadian edition
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso, Ibrahim M. Aly