Question

Rooney Pointers Corporation expects to begin operations on January 1, 2019; it will operate as a specialty sales company that sells laser pointers over the Internet. Rooney expects sales in January 2019 to total $230,000 and to increase 15 percent per month in February and March. All sales are on account. Rooney expects to collect 68 percent of accounts receivable in the month of sale, 22 percent in the month following the sale, and 10 percent in the second month following the sale.

calculate the accounts receivable at the end of march 31

Answer 1

Answer:

Determination of accounts receivable at the end of March 31 :

Particulars		Amount
Total Credit Sales ($230,000 + $264,500 + $304,175)		$798,675
Collections:
In respect sales for the month of January:
Collected in the month of January ($230,000 x 68%)	$156,400
Collected in the month of February ($230,000 x 22%)	$50,600
Collected in the Month of March ($230,000 x 10%)	$23,000	($230,000)
In respect of sales for the month of February:
Collected in the month of February ($264,500 x 68%)	$179,860
Collected in the month of March ($264,500 x 32%)	$58,190	$238,050
In respect of sales for the month of March:
Collected in the month of March ($304,175 x 68%)		$206,839
Accounts receivable at the end of March 31		$123,786