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Discus Productions needs to know its anticipated cash inflows for the next quarter by month. Cash sales are 10 percent of total sales each month. Historically, sales on account have been collected as follows: 60 percent in the month of sale, 30 percent in the month after the sale, and the remaining 10 percent two months after the sale. Sales for the quarter are projected as follows: April, $120,000; May, $100,000; and June, $80,000. Accounts receivable on March 31 were $60,000. Discus Productions would expect to have an accounts receivable balance on June 30 of a.$28,800. b.$37,800. c.$32,000. d.$42,000.

Respuesta :

TomShelby

Answer:

d.$42,000.

Explanation:

Based on the company's policy 40% of June sales will be uncollected at the end of June.

From May sales 30% wil be collected during June leaving 10% for collection in July.

Thus account receivable at June 30th:

June 30th Accounts Receivables:

40% June sales: 80,000 x 40% = 32,000

10% May sales: 100,000 x 30% =  10,000  

                                       Balance: 42,000

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