A company's accounts receivable balance at the end of December is $46,500, of which 16.50% is...

A company's accounts receivable balance at the end of December is $46,500, of which 16.50% is uncollected from December sales. The company's credit sales policy is as follows: 52.40% collected in the month of sale, 32.40% collected in the month immediately after the sale, with the remaining balance collected in the second month after the sale. How much were the total sales in November?

	$229,900
	$236,286
	$242,672
	$249,058
	$255,444

Solutions

Expert Solution

Given that,
Accounts receivable ending Balance on December = $46500

Account receivable pertaining to December included in the Ending Balance = $46500 *16.50%
				= $7673

We know that,
Balance amount ($46500-7673 = $38827) is pertaining to the uncollected balance of November month.

Remaning percentage of Collection for the Month of November = 100 - 52.4 - 32.4
				= 15.2%

If total sales of November is "x"

Then,

x * 15.2% = $38827

x = $255444 (Aprroximately)

Therefore 5th option is the correct answer.

jeff jeffy answered 1 year ago

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