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29 March, 09:53

Kuzma Foods, Inc. has budgeted sales for June and July at $ 670 comma 000 and $ 740 comma 000 , respectively. Sales are 90 % credit, of which 60 % is collected in the month of sale and 40 % is collected in the following month. What is the budgeted Accounts Receivable balance on July 31?

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  1. 29 March, 11:32
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    Account receivable = $266,400

    Explanation:

    Giving the following information:

    Sales:

    June = $670,000

    July = $740,000

    Sales are 90 % credit, of which 60 % is collected in the month of sale and 40 % is collected in the following month.

    On July 31, sales on account from June are technically collected. Sales on account pertain to July.

    Account receivable:

    From July = (740,000*0.9) * 0.4 = $266,400
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