In: Finance
A company's accounts receivable balance at the end of December is $60,180, of which 18.90% is uncollected from December sales. The company's credit sales policy is as follows: 54.80% collected in the month of sale, 34.00% 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?
A) $413,979
B) $424,873
C) $435,768
D) $446,662
E) $457,556
Given that, | |||||||
Accounts receivable ending Balance on December = $60180 | |||||||
Account receivable pertaining to December included in the Ending Balance = $60180 *18.90% | |||||||
= $11374 | |||||||
We know that, | |||||||
Balance amount ($60180 - $11374 =$48806 ) is pertaining to the uncollected balance of November month. | |||||||
Remaning percentage of Collection for the Month of November = 100 - 54.8 - 34 | |||||||
= 11.2% | |||||||
If total sales of November is "x" | |||||||
Then, | |||||||
x * 11.2% = $48806 | |||||||
x = $435768 | |||||||
Therefore option C is the correct answer. |