In: Finance
11. A company's accounts receivable balance at the end of December is $68,730, of which 20.40% is uncollected from December sales. The company's credit sales policy is as follows: 56.30% collected in the month of sale, 35.00% 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?
Given that, | |||||||
Accounts receivable ending Balance on December = $68730 | |||||||
Account receivable pertaining to December included in the Ending Balance = $68730*20.4% | |||||||
= $14021 | |||||||
We know that, | |||||||
Balance amount ($68730-$14021 = $54709) is pertaining to the uncollected balance of November month. | |||||||
Remaning percentage of Collection for the Month of November = 100 - 56.3- 35 | |||||||
= 8.7% | |||||||
If total sales of November is "x" | |||||||
Then, | |||||||
x * 8.7% = $54709 | |||||||
x = $628839 |