Kuzma Foods, Inc. has budgeted sales for June and July at $670,000.00 and $720,000.00, respectively. Sales...

Kuzma Foods, Inc. has budgeted sales for June and July at $670,000.00 and $720,000.00, respectively. Sales are 80% 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?

A. $230,400.00

B. $288,000.00

C. $214,400.00

D. $576,000.00

Camellia, a merchandising company, has provided the following extracts from their budget for the first quarter of the forthcoming year:

	Jan	Feb	March
Sales (30% cash)	$400,000.00	$700,000.00	$900,000.00

The company collects 60% of credit sales in the same month and the balance in the next month. Calculate the collections from the customers for the month of February.

A. $406,000.00

B. $700,000.00

C. $504,000.00

D. $616,000.00

Solutions

Expert Solution

ans 1
		June	July
	Sales	670,000	720,000
	Cash sales	134000	144000
	credit sales	536,000	576,000

	Collection of credit sales
	In the month of sales	321600	345600
	Next month of sales		214400

	Receivable balance		$ 230,400.00

	ans = option A		$ 230,400.00


ans 2
		Jan	Feb	March
i	Sales	$400,000.00	$700,000.00	$900,000.00
ii	Cash sales	$120,000.00	$210,000.00	$270,000.00
iii	credit sales	$ 280,000.00	$ 490,000.00	$ 630,000.00

	Collection of credit sales
iv	In the month of sales	168000	294000
v	Next month of sales		112000

vi=ii+iv+v	Collection from customer	$616,000.00

	Ans = option D		$616,000.00

ekkarill92 answered 1 year ago

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Kuzma​ Foods, Inc. has budgeted sales for June and July at $670,000.00 and $720,000.00​, respectively. Sales...

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