Question

Bright Minds expects to collect 70% of the sales on account in the month of sale, and 20% in the month following the sale, and the remainder in the second month following the sale.

Sales Budget
April May June
Cash sales 30,000 43,000 55,000
Sales of account 370,000 432,000 405,000

400,000 475,000 460,000

Bright Minds expects to collect 70% of the sales on account in the month of sale, and 20% in the month following the sale, and the remainder in the second month following the sale. What is the ending accounts receivable balance that would be reported on the second quarter pro forma balance sheet?

a. $164,700
b. $121,500
c. $283,500
d. $86,400

Answer 1

$768,700

Step-by-step explanation:

Trade Receivables Budget

April May June

Balance b/d 0 629,000 684,600

Add Credit Sales 370,000 432,000 405,000

Cash Received - 70% (259,000) (302,400) (283,500)

Cash Received - 20% 0 (74,000) (80,400)

Cash Received - 10% 0 0 (37,000)

Balance c/f 629,000 684,600 768,700

Therefore 768,700 will be reported as the amount of Accounts Receivables on the second quarter.