Question

Morganton Company makes one product and it provided the following information to help prepare the master budget:The budgeted selling price per unit is $70. Budgeted unit sales for June, July, August, and September are 8,500, 16,000, 18,000, and 19,000 units What is the accounts receivable balance at the end of July?

Answer 1

$672,000

Step-by-step explanation:

The computation of the account receivable balance at the end of July month is shown below:

Particular June July August September

Unit sales 8,500 16,000 18,000 19,000

Unit selling

price $70 $70 $70 $70

Sales $595,000 $1,120,000 $1,260,000 $1,330,000

Credit sales collection

40% in this

month sale $238,000 $448,000 $504,000 $532,000

60% in the

following month $357,000 $672,000 $756,000

Total collection $238,000 $805,000 $1,176,000 $1,288,000

For the account receivable at the end of July we considered the 60% oustanding amount i.e $672,000