Petal Co. reported the following information for 2016: $\quad\quad\quad\quad\quad\quad\quad\quad\text { October } \quad \text { November }\quad \text { December }$
$$930,000$870,000$1,080,000\text { Budgeted sales } \quad \$ 930,000 \quad \$ 870,000 \quad \quad\$ 1,080,000$ ?All sales are on credit. ?Customer amounts on account are collected 50% in the month of sale and 50% in the following month.
How much is the November 30 2016 budgeted Accounts Receivable?

A) $900000
B) $540000
C) $465000
D) $435000

Question

Petal Co. reported the following information for 2016:

\quad\quad\quad\quad\quad\quad\quad\quad\text { October } \quad \text { November }\quad \text { December }

$930,000$870,000$1,080,000\text { Budgeted sales } \quad \$ 930,000 \quad \$ 870,000 \quad \quad\$ 1,080,000

?All sales are on credit. ?Customer amounts on account are collected 50% in the month of sale and 50% in the following month.
How much is the November 30 2016 budgeted Accounts Receivable?

A) $900000
B) $540000
C) $465000
D) $435000

Cristie Chapman · Accepted Answer

Final Answer : D, Explanation :  For November 30, 2016, the budgeted Accounts Receivable includes 50% of November sales and 50% of October sales. November sales are $870,000, and October sales are $930,000. Therefore, the calculation is (0.5 * $870,000) + (0.5 * $930,000) = $435,000 + $465,000 = $900,000. However, since we are looking for the amount still receivable by the end of November, we only consider the 50% of November sales that hasn't been collected yet, which is $435,000.

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