Complete Question:
PA9.
LO 7.3 Fit band's estimated sales are:
$
OCTOBER 131,982
NOVEMBER 195,723
DECEMBER 249,283
JANUARY 124,298
FEBRUARY 124,284
MARCH 124,373
What are the balances in accounts receivable for January, February, and March if 65% of sales is collected in the month of sale, 25% is collected the month after the sale, and 10% is second month after the sale?
Answer:
JANUARY FEBRUARY MARCH
Amount received from November sales 19,572
Amount received from December sales 62,321 24,928
Amount received from January sales 80,794 31,075 12,430
Amount received from November sales 31,071
TOTAL $162,687 $56,003 $43,501
Explanation:
The balances calculated are based on the following formula:
Amount received = Sales Figure of that month * Percentage
65% in the month of sale is received, 25% in the next month and the residual is received in the second month after sales
For the month of November:
65% of its total sales will be received in november, 25% in the next month(December) and the residual 10% in the second month after sale(January). Likewise for the month of January, we see in the computation that 65% of sales was received in the same month, 25% in the next month February and the residual 10% in the second after sale which is in March.
