Question
In: Accounting
Enterprises reported the following cash collections in July and August from credit sales: July August From...
Enterprises reported the following cash collections in July and August from credit sales:
| July | August | ||||||
| From June receivables | $ | 39,000 | |||||
| From July sales | 126,000 | $ | 54,000 | ||||
| From August sales | 168,000 | ||||||
The company sells a single product for $20, and all sales are collected over a two-month period.
Required:
- Determine the number of units that were sold in July.
- Determine the percent of credit sales collected in the month of sale and the percent of sales collected in the month following sale.
- How many units were sold in August?
- Determine the accounts receivable balance as of August 31.
Solutions
Expert Solution
Answer A:
9,000 units
Explanation:
Total sales in July = $126,000 + $ 54,000 = $ 180,000
Selling price per unit = $ 20
Units sold in July = $ 180 000 / $ 20
= 9,000 units
Answer B:
The percent of credit sales collected in the month of sale = 70%
The percent of sales collected in the month following sale = 30%
Explanation:
In July, $ 126,000 is collected in July itself, and $ 54,000 is collected in August.
So, collections in July = $ 126,000 / $ 180,000 * 100
= 70%.
Collections in August = $ 54,000 / $ 180,000 * 100
= 30%
Answer C:
12,000 units
Explanation:
August sales collected in same month = $ 168,000
Total sales of August = $ 168,000 / 70 * 100
= $ 240,000
Sale units in August = $ 240,000 / $ 20
= 12,000 units
Answer D:
$ 72,000
Explanation:
Total sales in August = $ 240,000.
The percent of sales collected in the month following sale = 30%
Account receivable on August 31 = $ 240,000 * 30%
= $ 72,000
In case of any doubt, please comment.
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