Question
In: Accounting
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
2)
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 |
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