Question

Kuzma​ Foods, Inc. has budgeted sales for June and July at $ 680 comma 000 and $ 765 comma 000​, respectively. Sales are 85​% ​credit, of which 70​% is collected in the month of sale and 30​% is collected in the following month. What is the budgeted Accounts Receivable balance on July​ 31?

Answer 1

Answer:

$195,075

Explanation:

The computation of the budgeted account receivable balance as on July 31 is shown below:

= July budgeted sales × credit sales percentage × following month percentage

= $765,000 × 85% × 30%

= $195,075

We simply multiplied the July budgeted sales with the credit sales percentage and the following month percentage so that the budgeted account receivable balance could come